Venezuela's State-Owned Oil Company Misses Bond Coupon Payments Due To "Glitch", Bonds Tumble

Tyler Durden's picture

Just a month after dodging a default bullet thanks to a last-minute bond swap, Venezuela's state-owned oil company PDVSA missed coupon payments due on its bonds, according to JPMorgan. However, PDVSA president Del Pino raged on Twitter that "the information about a PDVSA default spread by the enemies of the fatherland is totally false," but the bonds saw prices tumble despite his statement.

PDVSA in October swapped $2.8 billion in bonds due in 2017 for new bonds maturing in 2020... but that bounce is now dead...


As Bloomberg reports, PDVSA has activated a 30-day grace period after not meeting the full coupon payments on its 2021, 2024 and 2035 bonds that were due last week. About $400 million was due on those bonds, while PDVSA did pay $135 million due on its 2026 debt last week, JPMorgan’s Javier Zorrilla writes, citing information from the paying agent on the bonds.

“We still believe PDVSA will make these payments during the grace period,” Zorrilla wrote in the report.

 

“However, this highlights the cash difficulties and mismanagement of PDVSA with regards to its liabilities.”

But, as Reuters reports, PDVSA, in a statement, said it had paid "punctually" its obligations due this month for 2021, 2024 and 2026 papers, and was also "in the process of executing" interest payments for the 2035 bond.

"In this way, PDVSA honors its commitment ... ratifying the financial solidity of Venezuelans' main industry," it said.

Prior to PDVSA's response, Reuters reports that Torino Capital had said the reported 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."

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.

But there is always a dip-buyer ready to scoop up collapsing bonds...

“I hope it gets cheaper so I can buy more,” said Diego Ferro, co-chief investment officer of Greylock Capital Management LLC in New York. “It’s a non-event most likely.”

Well the 2037s jut got a lot cheaper Mr. Ferro...

 

And all this on the day when the Bolivar crashed through 2000/$ on the black market for the first time... 

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Grandad Grumps's picture

The money is fake. There is not reason to repay fake.

AVmaster's picture

Stick a fork in it, venezuala is DONE...

NoDebt's picture

"We do not believe it reflects a change in authorities' willingness to service its international obligations."

No, it marks a change in authorities' ABILITY to service their international obligations.  They're out of money, folks.

 

Save_America1st's picture

so really?  You mean stating that information is "spread by enemies of the father land" just wasn't convincing enough for investors?  Is there no loyalty anymore these days, bitchez? ;-)

nmewn's picture

So, WTF is it with leftists and glitchiness? Is there some sorta course or exam they have to pass before they're declared full fledged Marxist moonbats? The ObamaCare website was described as "glitchy" by the prog media, did that mean it wasn't quite leftist enough or was that a passing grade?

I'm-Just-Tryin-To-Sort-Through-The-Fucking-Ashes-Here!!! ;-)

flaminratzazz's picture

it was coming into focus when it took 1.68 billion to build a website that crashed every time 4 people logged on but then -OMG! 

 

squirrel

 

nmewn's picture

Transnutered ebola infected zika squirrels carrying vials of swine flu in traffic!...lmao!

NoDebt's picture

Remember when all we had to worry about was endless articles about Grexit and the Ebola plague that was going to wipe out the world?  Ah, yes.  Good times.  Good times.

 

youngman's picture

I miss Greece....they had a major moment every week...a new vote every other week...it was exciting...stories of people starving to death...pensioners dying....no one paying their taxes or electric bills....it was great TV

flaminratzazz's picture

what was amazing was the size of the fvkin cock on that thing.

turnball the banker's picture
turnball the banker (not verified) Nov 21, 2016 10:16 PM

It just means that theyare lying cunts just like US gov

SAE6065's picture

OBUMMER and THE BERN could save that Socialist State. Free shit for everyone. 

tarabel's picture

 

 

This 24% bond looks like an excellent opportunity for the Dallas Police and Fire Pension Fund to get healthy again.

Maybe Chicago could use some too.

silverer's picture

I guess here come the Dallas and Chicago jokes. "A pensioner from Dallas walks into a Chicago bar..."

OregonGrown's picture

ATTENTION GOVERNMENT WORKERs:  It's a scam!  YOU WILL NOT RECIEVE ANY pension you were expecting/promised if you worked for ANY part of the government or are/were a public union employee.  

 

But, what in the fuck did you expect?  You didnt make shit!  You threw rule after rule and regulation after regulation at the ones that did, ONLY TO JUSTIFY YOUR JOB while not contributing $1 towards GDP.....Acting like the parasite you are, sucking the lifeblood from it's host till it died!

 

ASSHOLES DESERVE EVERY BIT OF WHAT YOU HAVE COMING!   NOTHING!!!

 

 

Chipped ham's picture

Uh-oh Spaghetti-o. 

silverer's picture

How to avoid "glitches". Own physical gold and silver. No glitches.

SantaClaws's picture

And hope you don't have a break-in when you are away.

Dragon HAwk's picture

What and steal my coffee can full of rusty nails out in the garage, under the greasy rag, leaning against my wheelbarrow

Mustafa Kemal's picture

I know someone who hides it there also

DontFollowMyAdviceImaDummy's picture

GLITCH?!  bwa hahahahahahahahahahahaha!   you aint gots no stinking dinero veneuzzwaaaaaaylah!  "glitch" must be the new way of saying DEFAULT

delacroix's picture

glitch?  I thought that was slang for pussy.

Kprime's picture

my new phone message will say, "dear creditors, we are experiencing a "glitch".  you can expect full payment in 2030. please stay in line."

Al Tinfoil's picture

Viva La Revolucion!!!!!!!!!!!!!!  Hugo Chavez' legacy lives on. 

Why is it that every country south of the US-Mexican border seems to run on Looney Tunes?   Is it something in the water?  An upside down magnetic field?  Toxoplasmosis caught from cats?  

Venezuela, with the largest oil reserves in the Western Hemisphere, cannot pay its bills, and its currency is crashing.  How incompetent do you have to be to screw up this badly?

Oh, yeah, it must be somebody else's fault. 

yngso's picture

DB most systemically risky bank, oil the riskiest busines, and Vzla the riskiest country as the first domino to fall and start the worldwide economic crisis?