Venezuela’s Bonds Propelled by Speculation PDVSA Is Eyeing Swap
- PDVSA notes due April 2017 have risen 5.3 cents this week
- Swap rumors fuel rally as country nears constitutional crisis
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Venezuela’s bonds are soaring on speculation the government may be looking to strike a deal to push back looming debt maturities, a move that would give the cash-strapped nation desperately needed breathing room.
State-owned oil producer Petroleos de Venezuela SA has seen its $3 billion of bonds due in April jump 5.3 cents this week to 69 cents on the dollar, the highest September 2014. Investors are buying amid rumors that the company known as PDVSA is pursuing a swap that will allow it to reduce debt service in 2017, said Daniel Urdaneta, a strategist at Knossos Asset Management in Caracas. The struggling oil producer faces interest and principal payments of almost $7.5 billion next year.