Venezuela

Venezuela's close ally China said on Monday that history shows external interference and unilateral sanctions only make things more complex and will not help resolve problems, after the United States imposed new sanctions on Venezuela, the International New York Times reported on a Reuters story. U.S. President Donald Trump signed an executive order that prohibits dealings in new debt from the Venezuelan government or its state oil company on Friday in an effort to halt financing that the White House said fuels President Nicolas Maduro's "dictatorship".

President Nicolas Maduro summoned holders of Venezuelan bonds to a meeting with Economy Minister Ramon Lobo next week to discuss the effects of U.S. sanctions aimed at sovereign and state oil company debt, Bloomberg News reported. U.S.-based holders of Venezuela bonds will be hurt the most by the sanctions, Maduro said. President Donald Trump “burned the bonds in their hands” by trying to harm Venezuela, he said, without providing more details on the meeting. “Attention, holders of Venezuela bonds,” Maduro said on state television.

The threat of US sanctions against Nicolás Maduro’s regime in Venezuela escalated this week, with vice-president Mike Pence warning of “more to come”. But investors appeared unmoved, the Financial Times reported. While bond prices initially dipped on Wednesday on reports that new sanctions could ban trading in new issues from the Venezuelan government and state oil group Petróleos de Venezuela (PDVSA), several of the bonds rebounded on Thursday.

At what point does a country’s political situation become intolerable for bond investors? That is the question facing holders of Venezuela’s debt as the nation’s descent into strife raises questions about investment ethics, the Financial Times reported. This week, Credit Suisse circulated a memo outlining a ban on trading in two Venezuelan bonds, reflecting growing unease about the reputational risks of being associated with a country under the increasingly autocratic government of Nicolás Maduro.

Credit Suisse is banning its traders from dealing with a batch of Venezuelan bonds, fearing any potential reputational fallout from being seen to support the increasingly autocratic government of Nicolás Maduro, the Financial Times reported. Goldman Sachs was earlier this year lambasted by the country’s opposition for its asset management arm’s purchase of $2.8bn worth of Venezuelan bonds issued by the state oil company, PDVSA, which opposition members said amounted to a financial lifeline for the authorities.

Predicting when Venezuela will finally default has been a decade-long parlor game for bond buyers, but recent events add urgency to the exercise, Bloomberg News reported. After years of mismanagement, the country appears closer and closer to running out of money. Adding to investors’ concern is the increasingly anti-democratic turn of President Nicolas Maduro, whose move to rewrite the constitution and strip power from congress has been met with U.S. sanctions.

Russia’s largest oil company disclosed another advance payment to Venezuela’s state producer after the U.S. sanctioned President Nicolas Maduro on Monday, Bloomberg News reported. Rosneft PJSC paid $1.02 billion to Petroleos de Venezuela SA in April for future crude supplies, the state-run Russian producer said in an earnings statement on Friday. That follows advance payments of about $1.5 billion in 2016 and comes a day after Rosneft Chief Executive Officer Igor Sechin pledged to stick with investment plans in the crisis-torn Latin American nation.

Venezuela’s state oil company, ensnared in the political crisis gripping the country, is asking bond investors for a temporary waiver from financial reporting requirements because it can’t complete the documents on time, Bloomberg News reported. Petroleos de Venezuela asked trustee Mitsubishi UFJ Financial Group Inc. for an extension to Aug. 11, at which point it expects to make the documents available, according to a letter dated July 31 that the bank sent to holders of notes due in 2020.

Investors have been bracing for a Venezuela debt default for more than a year, but fallout from the country’s widely criticized election last weekend could prove to be the tipping point, The Wall Street Journal reported. The government and state-owned oil company Petróleos de Venezuela SA, also known as PdVSA, together owe $5 billion in principal and interest payments due between now and the end of the year, according to Caracas Capital Markets. The country has $725 million due this month alone, the Venezuelan investment bank said.

The specter of tighter U.S. sanctions is pushing up the perception that Venezuela is getting closer to defaulting on its bonds, Bloomberg News reported. Venezuela is awaiting possible further restrictions after the U.S., its largest trading partner, sanctioned President Nicolas Maduro after he held elections Sunday for a new assembly that will rewrite the constitution. U.S.