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Venezuela next big debt payment due in April

Petroleumworldve.com 06 01 2017

Venezuelan Credit Dashboard: Next Big Payment Due in April

Venezuela looks set to start 2017 with a somewhat quiet first quarter in terms of debt repayment, with only $1.1 billion due over the first three months of the year. A majority of that -- $726 million -- has to be paid back in February.

The next big test is set for April, when nearly $3 billion comes due, and the market will be watching for any sign that might signal if either the government or state owned oil company PDVSA will attempt to try another swap operation to push out maturities. With the central government issuing new dollar debt for the first time since 2011 in late December, investors will be looking to see how the $5 billion of new notes are used.

Despite promises of surprise announcements by President Nicolas Maduro, 2016 ended without any any significant changes to economic policies including currency and price controls. The past two devaluations of the official exchange-rate both occurred in the first quarter of the year -- so the timing is ripe for currency news if the pattern holds.

With OPEC cuts starting to kick in, analysts will watch for any sustained up-tick in crude that would be great news for the struggling economy, which saw it's currency lose nearly three-fourths of its value on the black market last year.

To read more about Venezuela's new bond issue, click here.

Venezuela Dashboard Indicators

  • Dollar bonds ended the year on a good note, with the government's $4 billion of notes due 2027 rising 4.8 percent in December to 51.3 cents on the dollar as yields fell to 20.7 percent.
  • The implied probability of a default in the next 12 months declined to 59 percent from 60 percent at the end of November, according to CDS trading.
  • The odds of a default in the next five years declined to 91 percent in December.
  • Venezuela's international reserves hovered around a 14-year low of $11 billion.
  • The weakest official exchange-rate, used mostly for imports deemed non-essential, weakened 1.5 percent in December -- the biggest monthly decline since September -- to end the year at 673 bolivars per dollar. On the illegal black market, a dollar costs nearly five times as much.
  • The price Venezuela receives for its oil exports rose to $45.92 a barrel for the week ending Dec. 30, an increase of 15 percent from the previous month. The price ended 2016 up about 57 percent from levels seen at the end of 2015.

Story by Nathan Crooks from Bloomberg News.

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