Venezuela’s latest sovereign bond issuance has
left the market perplexed, with investors unsure of the
rationale behind this transaction.
Reports in the press point to $5 billion worth of 20-year
bonds with a coupon of 6.5% - a far cry from the 20% normally
commanded by investors buying debt from the troubled nation and
from some of its state-run organisations, such as
Petróleos de Venezuela (PDVSA). This issuance is also
the first recorded sovereign deal in the Latin American country
in over five years.
"The government bought debt
"The terms were clearly highly influenced by government,
which has shown itself to be creative and resourceful when cash
is needed," said Manuel Orozco, sovereign ratings’
analyst at Standard & Poor’s.
But, according to a legal source in Venezuela, the role of
the government-backed Banco de Venezuela (BdV) is causing
BdV were the sole buyers of the...