{"id":31901,"date":"2023-10-19T14:24:50","date_gmt":"2023-10-19T14:24:50","guid":{"rendered":"https:\/\/innodebt.com\/business\/venezuelan-bond-prices-soar-after-us-lifts-trading-ban\/"},"modified":"2023-10-19T14:24:50","modified_gmt":"2023-10-19T14:24:50","slug":"venezuelan-bond-prices-soar-after-us-lifts-trading-ban","status":"publish","type":"post","link":"https:\/\/innodebt.com\/?p=31901","title":{"rendered":"Venezuelan bond prices soar after US lifts trading ban"},"content":{"rendered":"<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=85b92d32-63e1-4d5f-9ac1-6c313eb79735\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>Venezuelan government bond prices soared on Thursday after the US government eased sanctions that had barred American investors from trading them, handing immediate large gains to some hedge funds. <\/p>\n<p>The price of Venezuela\u2019s sovereign dollar bond maturing in 2027 jumped more than 70 per cent to 19 cents on the dollar, according to Bloomberg data. <\/p>\n<p>The gains, which were mirrored in other Venezuelan debt, came after the US Treasury department late on Wednesday removed a ban on secondary trading of certain sovereign bonds as well as the debt of the state oil company, Petr\u00f3leos de Venezuela (PDVSA), as part of a broader easing of sanctions against Caracas.<\/p>\n<p>The country\u2019s bonds have for years traded at a small fraction of their face value, following Venezuela\u2019s default in 2017 and subsequent removal from widely followed indices, and the Trump-era trading ban.<\/p>\n<p>Some investors said the relaxation of sanctions could pave the way for an eventual restructuring of Caracas\u2019s debt. It could also allow Wall Street heavyweights to dive into the market in the hope of big profits on bonds still trading at highly distressed levels.<\/p>\n<figure class=\"n-content-image n-content-image--full\"><picture><source media=\"(min-width: 700px)\"  width=\"1400\" height=\"1000\"><\/source><source media=\"(max-width: 490px)\"  width=\"600\" height=\"800\"><\/source><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/innodebt.com\/wp-content\/uploads\/2023\/10\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/ee12ba80-6e83-11ee-a831-7ba28f18a216-standard.png\" alt=\"Line chart of Dollar bonds maturing in 2027 (cents on the $) showing Venezuelan bond prices soared after US signalled further d\u00e9tente\" data-image-type=\"graphic\" width=\"1400\" height=\"1000\"><\/picture><\/figure>\n<p>\u201cWe believe this is a start of a multi-step process\u2009.\u2009.\u2009.\u2009of reintroducing Venezuela into the financial mainstream,\u201d said Nick Lawson, chief executive of London-based brokerage Ocean Wall and a Venezuelan bondholder since 2021. \u201cThat will likely include ramping up of Venezuelan oil and natural gas production and exports, re-inclusion of Venezuelan bonds in major emerging market indices, debt settlement negotiations and eventual restructuring.\u201d<\/p>\n<p>Among the hedge funds to benefit from Thursday\u2019s rally was Lee Robinson\u2019s Altana Wealth, which launched a fund to buy Venezuelan debt three years ago. The company has roughly $75mn invested in sovereign and PDVSA bonds with a combined face value of almost $500mn as of the end of September, Robinson told the Financial Times. <\/p>\n<p>\u201cThere has been a major push from both sides [to improve relations] for over two years,\u201d he said. \u201cThe Middle East and the Russian attack on Ukraine have perhaps increased the urgency from [the] US and allies.\u201d<\/p>\n<p>The Biden administration announced it would partially lift sanctions following the resumption of talks between the oil-rich Latin American government and its US-backed opposition faction. The US has been exploring ways to boost global oil supplies and lower prices following Russia\u2019s full-scale invasion of Ukraine in 2022, which, along with a Saudi-led tightening of supply, have sent oil prices higher.<\/p>\n<p>The new agreement means certain sanctions are lifted for six months, with renewal dependent on the country\u2019s progress towards democratic elections. A ban on US investors buying any freshly issued Venezuelan debt remains in place.<\/p>\n<p>Graham Stock, a strategist at RBC BlueBay Asset Management, said the sanctions on primary issuance would need to be lifted before the country\u2019s debt could be restructured, a process that typically involved swapping defaulted bonds for newly issued ones.<\/p>\n<p>Following Wednesday\u2019s announcement, US secretary of state Antony Blinken said Washington expected the Venezuelan government to start releasing political prisoners and wrongfully detained US citizens. Five prisoners were released overnight, following the US announcements.<\/p>\n<p>\u201cIt\u2019s good news that the opposition and the government can agree on a path to free and fair elections under international watch but the complete normalisation of the oil industry and the financial access to capital markets will likely be a long path with many more hurdles ahead,\u201d said Armando Armenta, emerging market strategist at AllianceBernstein.<\/p>\n<p>\u201cFor the bonds, what will matter is whether the removal of the bond trading ban can lead to a successful restructuring of Venezuela and PDVSA debt,\u201d he said.<\/p>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.ft.com\/content\/85b92d32-63e1-4d5f-9ac1-6c313eb79735\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. Venezuelan government bond prices soared on Thursday after the US government eased sanctions that had barred American investors from trading them, handing immediate large gains to some hedge funds. The price of Venezuela\u2019s sovereign dollar [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[23],"tags":[],"class_list":{"0":"post-31901","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Venezuelan bond prices soar after US lifts trading ban | Innodebt<\/title>\n<meta name=\"description\" content=\"Unlock the Editor\u2019s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Venezuelan government bond\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/innodebt.com\/?p=31901\" 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