Photographer: Noah Friedman-Rudovsky

Venezuela’s Debt Problems Are About to Get Even Worse

  • Buffer period on Elecar’s $28 million payment ends Thursday
  • Deadline for $280 million of other payments is this weekend

Venezuela is set to fall even further behind on its debt.

With the national oil company already at risk of triggering default-insurance contracts because bondholders haven’t received a $1.1 billion principal payment that was due last week, the state electricity utility now faces the end of a 30-day grace period for $28 million in interest that it owes. To make matters worse, buffers for an additional $280 million of obligations from the government and Petroleos de Venezuela expire over the weekend. 

Due
Date

Amount Due

CUSIP

Grace Period

ELECAR 2018Oct. 10$27,625,000EH288874930 Days
PDVSA 2027Oct. 12$80,625,000EG311053330 Days
Venezuela 2019Oct. 13$96,718,566EH990129730 Days
Venezuela 2024Oct. 13$102,958,473EH990121430 Days

When the deadlines pass, investors can move to demand immediate repayment in full, though so far PDVSA bondholders have chosen to be patient in the hope the money will eventually get to their accounts. Traders are still trying to judge the fallout from Venezuela’s announcement last week that it would seek restructuring talks even as officials promised to meet all their obligations in the meantime.

“Most likely, many of those coupons are going to be delayed beyond the grace period,” said Alejandro Grisanti, the director of the Caracas-based research firm Ecoanalitica. “This uncertainty that we’ve lived through in the market these last few days will continue.”

Prices for Venezuelan securities have plummeted, with many sovereign bonds now trading below 30 cents on the dollar. The $650 million in notes from power utility Elecar, which have a grace period expiring Thursday, have dropped 35 cents in the past few days to 27 cents.

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