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PDVSA Bonds Backed by Citgo Tumble After U.S. Court Ruling

  • District court says Crystallex can take shares of Citgo holder
  • That could create a rush from other creditors to lay claim

Bonds from Venezuela’s state oil company backed by a stake in Citgo Holding Inc. dropped after a U.S. court ruled that a Canadian mining company can seize shares of the U.S. company that controls Citgo to satisfy a $1.2 billion arbitration award.

The $2.5 billion of notes due in 2020 sank 4.75 cents to 85.5 cents on the dollar, the biggest decline since November. Venezuela’s benchmark sovereign notes dipped to a six-month low while Citgo securities were little changed.