Published: Fri, August 25, 2017
Sci-tech | By Carrie Guzman

Venezuelan Bonds Up After New US Sanctions Spare Debt Trading

Venezuelan Bonds Up After New US Sanctions Spare Debt Trading

It would also restrict PDVSA's US subsidiary, Citgo, from sending dividends back to Venezuela as well as ban trading in two bonds the government recently issued to circumvent its increasing isolation from western financial markets.

But many USA and other global investors holding Venezuelan debt anxious that they also would have been harmed by any punitive measures that prevented the trading of these bonds.

Trump has so far spared Venezuela from broader sanctions against its vital oil industry, but officials have said such actions are under consideration.

On Thursday Venezuelan President Nicolas Maduro highlited the necessity of preparing against a possible military action toward Venezuela in order to defend the country's sovereignty, speaking as Latin American military leaders meet with U.S. Southern Command in Lima, Peru, following threats of a "military option" to be considered against Venezuela by U.S. President Donald Trump.

The Treasury Department has already issued a wide range of sanctions against Venezuelan President Nicolas Maduro and his associates after he moved to consolidate power in July.

They prohibit USA financial institutions from engaging in any new financial deals with the Venezuelan government or state-run oil company PDVSA.

Venezuelan Oil Minister to Switch Places With PDVSA Chief

Reflecting a strong lobby effort by the US oil industry, Friday's action stopped short of cutting off USA imports of Venezuelan oil that are crucial both to Venezuela's economy and to US refiners. Last month, Maduro's government held a vote to replace the opposition-controlled National Assembly with an entirely new legislature filled with his supporters. Several prominent opposition mayors have also been removed or ordered arrested by the government-stacked supreme court.

The sanctions will make it harder and costlier for Venezuela to scrounge up badly needed financing, raising the possibility that it will have to stop payment on its ballooning foreign debt.

Venezuela government bonds due in 2034 gained 2.3% to 38.875 cents at midday Friday, according to Thomson Reuters.

Almost 130 people have been killed this year in anti-government protests.

Venezuela has already been wracked by widespread shortages and triple-digit inflation as its oil-dependent economy has faltered.

Venezuela has taken desperate steps to remain current on its debt throughout the economic crisis, and the president has blamed his enemies for spreading rumors about any impending default.

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It dropped, as 49 investors sold GPC shares while 211 reduced holdings. 62 funds opened positions while 151 raised stakes. RBC Capital Markets maintained Wheaton Precious Metals Corp (NYSE:WPM) on Wednesday, November 4 with "Outperform" rating.

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