markets

Venezuela Is Late on $1.7 Billion and Bond Traders Are Stuck

Updated on
  • PDVSA, nation owe $705 million in coupon payments in February
  • Venezuelan bonds have rallied a world-leading 13% this year

It’s been more than three months since the first of more than a dozen Venezuelan bonds was declared in default, and the arrears keep stacking up.

Wall Street investors reluctant to give up hope they’ll eventually be paid are in limbo after the nation and its state oil company busted through grace periods on about $1.7 billion of debt payments, rating firms declared many securities in default and swaps that provide insurance against non-payment were triggered.

For now, everyone is just waiting. Creditors have yet to organize to formally seek compensation on the late payments, and fund managers who previously cycled through contacts from Caracas to Frankfurt seeking updates amid the government’s silence have resigned themselves to the fact that daily panic attacks aren’t worth the time or energy.

President Nicolas Maduro, who first called for a restructuring in November, said Thursday that talks are advancing “impeccably,” without providing any details. Several bondholders have told Bloomberg News there’s been no progress.

Some money managers still expect Venezuela to follow through on its principal payments, although it will be a long wait. The next maturity date is Aug. 15 for $753 million of sovereign notes. Venezuela’s bonds have gained a world-leading 13 percent this year, although much of the appreciation came from price markups after the Emerging Markets Traders Association recommended the notes trade without accrued interest.

Here’s the latest breakdown of the bonds in flux:

BondCoupon Value (Millions of USD)Due DateGrace Period EndAnnouncements
VENZ 2019$96.70Oct. 13Nov. 13S&P declares selective default
Moody’s declares technical default
Fitch declares restricted default
Gov’t says it started payments
Euroclear said to not receive interest payment
VENZ 2024$103.00Oct. 13Nov. 13S&P declares selective default
Moody’s declares technical default
Fitch declares restricted default
Gov’t says it started payments
Euroclear said to not receive interest payment
PDVSA 2027$80.60Oct. 13Nov. 13S&P declares selective default
PDVSA says it made payment
VENZ 2025$61.20Oct. 21Nov. 20S&P declares default
Euroclear said to not receive interest payment
Clearstream said to hold cash for payment
Interest payment said to reach some holders
VENZ 2026$176.30Oct. 21Nov. 20S&P declares default
Euroclear said to not receive interest payment
PDVSA 2020$143.10Oct. 27Nov. 27Torino says some holders received principal payment
PDVSA says made principal payment
DTC said to tell traders it received interest payment
Reuters reports some holders in talks with lawyers
PDVSA 2022$90.00Oct. 28Nov. 27PDVSA says it began interest payments
Euroclear said to not receive interest payment
VENZ 2023$90.00Nov. 7Dec. 7Euroclear said to not receive interest payment
S&P declares default 
VENZ 2028$92.50Nov. 7Dec. 7Euroclear said to not receive interest payment
S&P declares default
PDVSA 2026$135.00Nov. 15Dec. 15PDVSA says it began interest payments
S&P declares default
PDVSA 2024$150.00Nov. 16Dec. 18S&P raises rating to CC, saying it was "inadvertently lowered"
PDVSA says it began interest payments
S&P declares default
PDVSA 2021$107.70Nov. 17Dec. 18PDVSA says it began interest payments
S&P declares default
PDVSA 2035$146.30Nov. 17Dec. 18PDVSA says it began interest payments
VENZ 2018$35.00Dec. 1Jan. 2S&P declares default
VENZ 2020$45.00Dec. 12Jan. 11S&P declares default
VENZ 2036$162.50Dec. 29Jan. 29Moody’s withdraws rating
VENZ 2034$70.00Jan. 16Feb. 15None
(Updates with Maduro comment in fourth paragraph.)
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