(Adds Torino capital says apparent ‘technical mistake’ not indication of default, paragraphs 7-11, PDVSA)
Nov 21 Venezuelan state oil company has delayed $ 404 million in bond coupon payments due this month on its 2021, 2024 and 2035 bonds, a JPMorgan report and some bondholders said on Monday.
PDVSA missed those payments despite having made a payment on a different bond last week, JPMorgan analysts said, adding they expect PDVSA make the missing payments within a 30-day grace period.
“This highlights the cash difficulties and mismanagement of PDVSA with regards to its liabilities,” the analysts wrote.
The report noted that PDVSA did make a $ 135 million coupon payment on its 2026 bond, citing information provided by paying agent Citi and settlement group Clearstream.
Citi and PDVSA did not immediately respond to request for comment. Three bondholders confirmed the delay to Reuters.
The 2021 bond was down 0.900 point to a bid price of 48.500, the 2024 was up 0.650 point to a bid of 38.000 and the 2035 issue was up 1.330 points to bid 46.500, according to Thomson Reuters data.
Torino Capital said the delay appeared to be “a technical mistake” rather than an indication of default.
It noted that payments were being made “through accounts not conventionally used for these purposes” and that some PDVSA management changes had occurred, both of which could have contributed to a delay.
“Our tentative conclusion is thus that the delay in payments likely reflects administrative and technical issues of the type that the 30-day grace period is designed to handle,” wrote its chief economist Francisco Rodriguez in a note to clients.
“We do not believe it reflects a change in authorities’ willingness to service its international obligations.”
Earlier this month, PDVSA had said it would honor all interest payments for its 2021, 2024, 2026 and 2035 papers.
PDVSA in October swapped $ 2.8 billion in bonds due in 2017 for new bonds maturing in 2020.
Venezuela bonds trade at distressed levels as a result of investor concern that a steep recession and spiraling inflation will leave it without resources to meet heavy commitments.
The country’s sovereign bonds on average pay 26 percentage points more than comparable U.S. Treasury Notes, according to JPMorgan’s Global Diversified Emerging Markets Bond Index.
Socialist President Nicolas Maduro says the country will meet all its debt commitments and calls default talk a right-wing conspiracy against him.
He has also accused global banks of leading a “financial blockade” that has left Venezuela with few financing options amid the oil market downturn. (Reporting by Corina Pons and Eyanir Chinea; Writing by Brian Ellsworth; Editing by Sandra Maler and Grant McCool)