Venezuela

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.

Venezuelan debt is kicking off 2018 on a tear. The nation’s bonds, which led global losses in 2017 after the government declared it needed to restructure its debt, have returned a world-leading 12 percent, Bloomberg News reported. That’s four times what investors got from second-place Tajikistan, according to data compiled by Bloomberg.

Bonds investors are finally acting like they’ve lost hope that Venezuela will make any future debt payments, The Wall Street Journal reported. Traders debated for weeks about whether to continue pricing the oil-rich country’s sovereign debt with the assumption that it would keep making interest payments. But as the pile of unpaid coupons racked up, the association for emerging market debt traders this week threw in the towel and announced that from now on, the market should assume Venezuela isn’t likely to pay.

Fund managers holding Venezuela government bonds face a day of reckoning after months of waiting for more than half a billion dollars in late interest payments, Bloomberg News reported. Since November, investors following guidelines established by the Emerging Markets Traders Association have marked their Venezuela bond holdings to include all the interest they were owed, even though it hadn’t shown up yet. The trade group decided to scratch that rule Monday, and say that beginning today the nation’s debt will trade flat, or without accrued interest.

Venezuela’s bonds have lost about three-quarters of their value, reflecting a dozen missed payments by the government and the state-owned oil company. But many of their bondholders are still feeling flush, The Wall Street Journal reported. A number of investors have made their money back and more, thanks to coupon payments topping 13% and large principal payments that typically begin three years before a bond matures. A recent example includes bonds from state-oil company Petróleos de Venezuela SA, or PdVSA, which matured in November.

Venezuela has defaulted on another debt obligation, according to S&P Global Ratings, intensifying investor fears about the country’s ability to make more than $9 billion in bond payments due in 2018,The Wall Street Journal reported. The ratings firm said Tuesday that Venezuela failed to make $35 million in coupon payments for its bonds due in 2018 within a 30-day grace period. The government and the state-owned oil company are now behind on $1.28 billion in payments, according to investment firm Caracas Capital. S&P classifies these missed payments as defaults.

As the rest of the oil-producing world recovers on the back of stronger energy prices, Venezuela is getting worse, the result of dysfunctional management, rampant corruption and the country’s crippling economic crisis, the New York Times reported. The deepening troubles at the state oil company, the country’s economic mainstay, threaten to further destabilize a nation and government facing a dire recession, soaring inflation and unbridled crime, as well as food and medicine shortages.

Mining company Crystallex International Corp said on Thursday Venezuela failed to honor a settlement and urged a federal judge to allow it to seize control of U.S. refiner Citgo Petroleum Corp., which is owned by the country’s state oil company, Reuters reported. Canada-based Crystallex won a 2016 international arbitration award of $1.2 billion against Venezuela, which has refused to pay. The company had been trying to collect by seizing shares of Citgo’s U.S. parent company, which is owned by Venezuelan state oil company PDVSA.

Venezuela investors are worried they’re getting ghosted. That’s the concern among a growing number of sovereign bondholders six weeks after the government’s mysterious announcement that it would seek to restructure its debt while also continuing to pay what’s owed in the meantime, Bloomberg News reported. It’s now been a month since a creditor meeting in Caracas produced no specific proposals, and as overdue bond payments pile up without any word from officials, the relationship looks to be on rocky ground.

One of China's biggest state-run conglomerates has sued a Venezuelan counterpart in a U.S. court in a dispute over unpaid bills, a sign of Beijing's growing impatience with its socialist South American ally as it slides into bankruptcy, the International New York Times reported on an Associated Press story. In the lawsuit filed Nov. 27 in a Houston federal court, a U.S. subsidiary of Sinopec sought more than $23 million in damages from Venezuela's state-run oil company, PDVSA.