Venezuelan Oil Company PDVSA's Bonds Hit by EMTA Market Move

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Emerging markets trade group EMTA has recommended that bonds issued by Venezuela’s state-owned oil firm PDVSA should be traded “flat”, or without accrued interest, the way bonds in default are typically traded. The move follows a similar advisory from EMTA on Venezuelan sovereign bonds last month and is likely to extinguish any lingering belief that Caracas might try and avoid a default by PDVSA -- the source of 90 percent of Venezuela’s export revenue -- to protect its key oil assets, Reuters reported. Venezuela is undergoing a major crisis, with quadruple-digit inflation and shortages of food and medicine. Economists consistently describe a 15-year-old currency-control system as the principal obstacle to functioning commerce and industry. The move follows a similar advisory from EMTA on Venezuelan sovereign bonds last month and is likely to extinguish any lingering belief that Caracas might try and avoid a default by PDVSA -- the source of 90 percent of Venezuela’s export revenue -- to protect its key oil assets. Venezuela is undergoing a major crisis, with quadruple-digit inflation and shortages of food and medicine. Read more.