HALISTER1: Venezuela Debt Swap Speculation May Disappoint, Nomura Says

Venezuela Debt Swap Speculation May Disappoint, Nomura Says

(Bloomberg) -- Rally in shortest maturities of PDVSA and Venezuela bonds yday was due to rumors of debt reprofiling that have circulated in market for months, Nomura’s Siobhan Morden says in note.
  • Nothing of substance to suggest any imminent formal offer
  • Most investors would require that any breakeven ratio for an exchange of PDVSA 2017s into theoretical 2021 maturity will include forfeited appreciation of the pull to par of the 2017s
    • This argues for breakeven ratio closer to 1.83 vs 1.43 ratio for 2017/21 maturities at current market prices
  • Hard to assess what other incentives Venezuela/PDVSA could offer for a neutral or positive net-present-value exchange, considering current cashflow constraints
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
PDVSA VC (Petroleos de Venezuela SA)

People
Siobhan Morden (Nomura Holdings Inc)

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