Economics

JPMorgan Said to Be Reviewing Venezuela's Status in Bond Indexes

Hausmann had called on the bank to remove country back in 2017
Nation’s debt could fail JPMorgan’s liquidity test for indexes

Opposition activists pour to the streets to back Venezuelan opposition leader Juan Guaido's calls for early elections, in Caracas on February 2, 2019. - Tens of thousands of protesters were set to pour onto the streets of Caracas to back self-proclaimed acting president Guaido's calls for early elections as international pressure increased on President Nicolas Maduro to step down. Major European countries have set a Sunday deadline for Maduro to call snap presidential elections. (Photo by Federico PARRA / AFP) (Photo credit should read FEDERICO PARRA/AFP/Getty Images)Photographer: FEDERICO PARRA/AFP

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By Ben Bartenstein

February 4, 2019 at 10:18 PM UTC

This article is for subscribers only.

Venezuelan government debt may be entirely removed from JPMorgan Chase & Co.’s flagship emerging-market bond indexes after U.S. sanctions effectively wiped out trading in the securities, according to two people familiar with the matter.

The bank’s index team, which previously said it was reviewing the status of bonds from Petroleos de Venezuela SA in its gauges, is now also considering whether to drop the sovereign notes from its EMBI+, EMBI Global and EMBI Global Diversified benchmarks because of low liquidity, the people said. The broader review comes after the U.S. Treasury Department on Friday put trading restrictions on the sovereign bonds similar to the ones that exist on PDVSA debt.