Front-end already prices in this scenario, recommends higher-coupon bonds that have under-performed in the longer end, such as PDVSA 2035 bonds

enezuela Seen Muddling Through Bond Payments: Morgan Stanley
By Christine Jenkins
(Bloomberg) -- "Stronger-than-expected import compression and a more confident regime mean we expect upcoming payments to be made," strategists including Simon Waever write in report.
Recent political developments mean willingness to pay remains intact, or may have strengthened
"A default could prove too costly for the oil industry - virtually the only source of hard currency - and could make even worse an already battered economy"
With Russia, estimates a total of $5.7b of net prepayments are now outstanding that may mean annual compensation of around $1.8b
Lower FX assets and sanctions have pushed the longer end near record lows
In a still negative but more certain political outlook, sees that bonds have room to trade well in the coming months given that repayments will be relatively low until August 2018
Front-end already prices in this scenario, recommends higher-coupon bonds that have under-performed in the longer end, such as PDVSA 2035 bonds