Guido Chamorro, a senior investment manager at Pictet Assets Management Limited, in a telephone interview from London on Aug. 3. "The recovery value will depend on whether the current administration is maintained after the default or there is a new one."

08-07-17  "If the debt is restructured by the current administration, the recovery value could be as low as 20-25 cents for every dollar of unsecured bonds," says Guido Chamorro, a senior investment manager at Pictet Assets Management Limited, in a telephone interview from London on Aug. 3. "The recovery value will depend on whether the current administration is maintained after the default or there is a new one." "If this administration is maintained the recovery value will be very low, it could even reach the range of 20-25 cents for the unsecured bonds." "Our estimates of debt to GDP ratio, summing up all the debts of the country, is almost 150% and in the last defaults we have seen in countries like Ukraine or Belize, after the restructuring, debt to GDP was lowered to levels Of 75%, which implied a fall of 50% of the debt. " "It should be taken into account that Venezuela and PDVSA have a certain type of debt that could have a recovery value greater than that of bonds. This debt, such as the debt it has with China is secured by the flow of oil, would have A higher recovery value. " "This is the scenario for a restructuring that will keep this administration in power. In this scenario, the growth of the country, which is already in the third year of recession, does not recover." "The second scenario would be with a new administration where the exchange rate is completely liberalized and where the oil production sector is completely open to foreign investment to attract investment. Will have stabilized and output will start to grow, increasing the country’s GDP, so the recovery value could reach for unsecured bonds up to 50 or 60 cents per dollar."