Too Bad to Come Out of the Index
Also Citgo governance, the Vision Fund, IPO negotiations and factors.
As part of its efforts to cripple the regime of Venezuelan President Nicolás Maduro, the U.S. government has made it illegal for U.S. investors to buy bonds of Venezuela’s government or of its state-owned oil company, Petróleos de Venezuela SA. U.S. investors can hold on to Venezuelan bonds that they already own, but they can’t buy any more; they can sell their bonds, but only to non-U.S. investors.
JPMorgan Chase & Co., meanwhile, runs emerging-market bond indexes that a lot of investors and exchange-traded funds use as benchmarks. The Venezuelan bonds are in the indexes. Should they come out? The trading ban is “a development that typically would prompt JPMorgan to yank the notes from its indexes,” but: