Venezuelan President Threatens Legal Action Over JPMorgan's "Campaign Of Terror"

Following last night's news that Venezuela's state-owned oil company PDVSA had missed payments on several bond coupons, the company has categorically rejected the false accounts published in the media arguing that the payments were "in effect, sent to Citibank and then JPMorgan comes out with that totally false information this afternoon." Del Pino raged that Citibank deliberately delayed payments from PDVSA as part of a “campaign of terror” against the company and Venezuelan President Maduro is looking into legal action against JPMorgan over their report.

As we detailed overnight, 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 Bloomberg reports this morning, Venezuela’s state-owned oil company Petroleos de Venezuela SA denied that it missed coupon payments on bonds.

JPMorgan Chase & Co. said in a report published Monday that the company, which last month persuaded investors to accept a debt exchange as it struggles to fend off default, hadn’t fully paid coupons on bonds due 2021, 2024 and 2035. JPMorgan said it still expected the payments to be made within the grace period and that the delay wouldn’t amount to a default.

 

PDVSA paid the interest on its 2021 and 2024 bonds and the interest on its 2035 bonds was in the process of being paid, the company said in a statement posted by PDVSA’s chairman and Venezuelan oil minister Eulogio Del Pino on his Twitter account late Monday. The company said it categorically rejected the false accounts published in the media.

 

“It was, in effect, sent to Citibank and then JPMorgan comes out with that totally false information this afternoon, which became a trending topic on Twitter,” Del Pino said on late-night television talk show Zurda Conducta.

 

Del Pino suggested that bondholders should call Citigroup Inc. and complain about the late payment.

 

Citibank deliberately delayed payments from PDVSA as part of a “campaign of terror” against the company, he said.

Furthermore, Reuters reports that:

  • VENEZUELA PRESIDENT MADURO SAYS PDVSA HAD DEPOSITED MONEY FOR BOND PAYMENT IN CITIBANK ON TIME
  • VENEZUELA PRESIDENT MADURO SAYS HAS ASKED PDVSA PRESIDENT TO LOOK INTO POTENTIAL LEGAL ACTION AGAINST JPMORGAN OVER BOND REPORT
  • VENEZUELA PRESIDENT SAYS U.S. TREASURY DEPARTMENT SUPPORTING CAMPAIGN AGAINST PDVSA