Venezuela’s PDVSA makes $2.2bn bond payment

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Never mind that embattled Venezuela is besieged by popular protests food shortages, and international scorn as the government grows increasingly dictatorial: National oil company PDVSA made some $2.2bn in bond payments on Wednesday.

Despite the country’s falling oil production and foreign reserves at low levels, last week PDVSA said it will make good on payments.

A bondholder told the FT that the payment had been made. Reuters and Bloomberg also cited investors and bondholders who said the payment was received.

Bondholders may be breathing relief as the crisis-ridden socialist country had been triggering fears of a default, again, ahead of this multi-billion bond payment.

The cost of insuring Venezuelan debt against a default had risen since the government-controlled Supreme Court, attempted to take over the opposition-dominated National Assembly two weeks ago. The measure was quickly reversed amid cries of “coup”, but the damage was already done, spurring a sell-off.

Even as Venezuelan officials have repeatedly said they will meet their foreign obligations, do not hold your breath: The cash-strapped sovereign and PDVSA still face over almost $700m in interest payments this month, and some chunky $3.5bn in bond payments in October and November.

“They are not done yet,” warns Russ Dallen at investment bank Caracas Capital. Meanwhile, critics of the unpopular president Nicolás Maduro, who was jeered and showered with eggs and insults during an event on Tuesday evening, have vowed to remain in the streets.

Despite the woes, BancTrust said in a note on Wednesday: “We believe the company will continue to collect the necessary funds in order to honor its financial commitments. We also maintain our belief that the company’s willingness and capacity to pay will remain intact.”

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