Venezuela ‘Has & Will Have’ Cash, Makes $185M Debt Payment
In making a $185 million debt payment Thursday, the Venezuelan government said it will meet its debt obligations.
By
Dimitra DeFotis
Sept. 21, 2017 6:24 p.m. ET
Venezuela may be running on fumes and U.S. sanctions may hurt, but the government coughed up $185 million to pay the coupon on a bond maturing in 2027, according to several reports.
Moreover, the government's office of public credit Tweeted to critics on Thursday at 1 p.m. that "the
Republic has and will have the resources to honor their obligations" and subsequently Tweeted that it
made a "cash payment at the coupon VENZ 2027(9.25%)."
Bloomberg then confirmed that the Bank of New York Mellon, the paying agent for the $4 billion Venezuela bond due on 9/15/2027, with a 9.25% coupon, received the $185 million necessary to pay the coupon. It was five days late, and many investors fear that Venezuela could default on its debts.
Of course, it's not clear if the government's future tense meant that it would have the resources today, or until the end of time. Investor, lawyer and publisher
Russ Dallen at
Caracas Capital, who has his finger on Venezuela's financial pulse, is more apt to believe the former. He wrote in an email this evening that his instigation via Reuters and Bloomberg coverage, has "caused Venezuela to be embarrassed and finally hustle to get the bond paid today."
Maybe it's just that Venezuela doesn't want to default, and its oil production means it has a few dollars and a few friends with deep pockets.
Bonds issued by the Venezuelan government and government controlled energy producer
Petroleos de Venezuela or Pdvsa are among the holdings in the
iShares JPMorgan USD Emerging Markets Bond exchange-traded fund (
EMB) and the
VanEck Vectors Emerging Markets High Yield Bond ETF (
HYEM). Each fund's price was flat Thursday. The
iShares Latin America 40 ETF (
ILF) slipped 0.6%.
Venezuela ‘Has & Will Have’ Cash, Makes $185M Debt Payment
