Venezuela Sees Opportunity to Access International Debt Markets – Reuters

CARACAS (Reuters) – The decline in risk premiums associated with Venezuelan debt has created an opportunity for the country to access international capital markets, according to Economy Vice President Miguel Perez.

This comes at a time when Venezuela and its state oil company, PDVSA, are facing substantial debt repayments amidst weak oil prices and ongoing challenges within its socialist economic framework. In recent years, both entities have struggled to secure borrowing due to prohibitively high yields.

"Country risk, an important indicator, has decreased by over 1,100 points, which allows us to explore new financing sources in international markets," Perez stated in a televised address.

He did not provide further specifics regarding their borrowing strategy.

Currently, Venezuelan bonds are yielding approximately 2,600 basis points above comparable U.S. Treasury notes, as per the JPMorgan EMBI Global Diversified Index. Earlier this year, those yields had soared above 3,300 basis points due to heightened concerns about potential defaults by Venezuela or PDVSA. However, as oil prices have improved, investor confidence has rebounded, yet Venezuela’s yields remain the highest among emerging market nations.

In 2022, PDVSA announced intentions to pursue a debt swap to manage this year’s significant maturities, which include $3 billion in principal repayments. However, investors indicate that there has been limited progress on this proposal, which would necessitate the issue of new debt.

President Nicolas Maduro has emphasized that the ruling Socialist Party has never defaulted on a debt payment and accuses opponents of spreading rumors of a default to destabilize his government. He has referred to the high yields on Venezuela’s debt as a form of "financial blockade" against his administration.

PDVSA last issued global bonds in 2014, while Venezuela has not sold bonds since 2011, according to data from Thomson Reuters.