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Mittwoch, 12. Juli 2017

Venezuela's PDVSA postpones bond investor calls

Venezuela's PDVSA postpones bond investor calls

(UPDATES throughout)

    NEW YORK, July 11 (IFR) - Venezuela's PDVSA has postponed bond investor
calls scheduled for this week, in yet another misstep by the cash-strapped oil
company battling to meet debt payments.

With lawyers yet to sign off on a presentation containing non-public
information, PDVSA decided to wait, investors who had talked to BancTrust, the
bank organizing the calls, told IFR.

Before the call, PDVSA also wanted to publish 2016 financials with a major
auditor's opinion on the figures - something it failed to do the year before, an
investor was told.

    Calls were seen as a welcome step by a buyside that had struggled to extract
information from PDVSA as the country falls deeper and deeper into economic and
political crises

"Investors have a laundry list of questions on everything from the operational
performance to the political backdrop," Sean Newman, a senior portfolio manager
at Invesco, told IFR last week.

PDVSA's recent efforts to address buyside concerns have largely failed, and the
markets have grown accustomed to what is seen as characteristic mismanagement
from a government with little market savvy.

But with the former head of Citgo reportedly being offered the PDVSA presidency
last month, hopes were that new management could on this occasion lay out a
clearer message. [nL8N1JY4G0]

It appears they will now have to wait until later in the year. 

"They will apparently try again once they publish the 2016 financials, so they
don't run the risk of releasing material non-public information," one investor

Those results are expected to be released around July 28, so calls could take
place during the first week of August, said another buyside account. That would
put any deal about a month away from the start of a series of big bond payments.

Holders of the 8.5% 2020s are owed a US$842m amortization payment on October 27;
five days later another US$1.121bn is due on the 8.5% November 2 2017s.

PDVSA's managing director of planning was quoted by Reuters on Tuesday saying
that the company could seek to renegotiate the October bond payments. The 2017s
were inching lower in morning trading to be quoted at 86.50-87.50, reflecting
uncertainty over whether PDVSA can cover its payments later in the year.

"With less than a year to go (to maturity) you would want to see that bond on
the other side of 90," said Michael Roche, an EM fixed-income analyst at Seaport

    Investors had been told that a possible US dollar bond could follow the
investor calls, but accounts remain skeptical.

Any bond is likely to face scrutiny from an emboldened political opposition, and
many doubt that a smaller bank like BancTrust could pull off a trade of
substantial size.

In June, Goldman Sachs faced a barrage of criticism after buying US$2.8bn of
PDVSA 6% 2022s - dubbed "hunger bonds" because the government slashed food
imports to meet hefty debt obligations.

And with little collateral left to sweeten a debt sale, investors are likely to
demand very high yields on any new issue. 

"We know where the last mark-to-market on a new deal is," said Newman, referring
to a Wall Street Journal report that Goldman offloaded some of its PDVSA 2022s
at just 32.5 cents, slightly more than the 31 it paid.

(Reporting by Paul Kilby and Davide Scigliuzzo; Editing by Marc Carnegie)

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