Investors Sift Through Venezuela Debt Black Box as Some Bondholders See Path for Restructuring in the Short Term; 9.25% 2027 Notes at 43

Reporting: Maria Abreu, Magnus Scherman, Simon Schatzberg Relevant Document: 2015 National Assembly Report (in Spanish) Venezuela’s sovereign bonds are holding steady with the $4 billion 9.25% 2027 at 43 cents today, having bounced around 10 points since U.S. forces captured President Nicolas Maduro on Jan. 3, sources told Octus. Bonds issued by state oil company PDVSA have also climbed significantly since last week, with its $3 billion 11.75% bond due 2026 quoted at 32 today, according to Solve. Sources told Octus they expect meaningful policy changes in Caracas in the short term amid heavy U.S. pressure, which could lay the groundwork for Venezuela to commence an economic recovery process, including a restructuring of its sovereign debt and outstanding trade claims. Canaima Capital, a Venezuela-focused fund, told Bloomberg on Jan. 5 that a debt restructuring could take place as early as this year. Canaima founder Celestino Amore hinted that a workout could involve limited haircuts and a value recovery instrument to align payout to creditors with Venezuela’s economic bounceback. The Venezuela Creditors Committee, a bondholder group that has been in place for several years, held a meeting on Jan. 5, but is not commenting on the situation, sources close told Octus.[...]