Venezuela Said to Be Late on $185 Million Sovereign Bond Payment
(Bloomberg) -- Venezuela, one of the world’s riskiest countries for investors, is late on a debt payment.
The intermediaries tasked with passing along interest payments for the cash-strapped nation haven’t received the funds for an $185 million coupon that was due Sept. 15, according to people with knowledge of the matter. Investors interviewed by Bloomberg say they haven’t been paid, and brokers say their clients are still waiting on the cash.
The government has a 30-day grace period -- now 25 days -- to make good on the payment before triggering an event of default on the notes.
Venezuelan officials are mum about what’s going on. The public credit office, which typically makes an announcement on its Twitter account once it transfers funds for bond payments, hasn’t said anything. A person at the office declined to comment on whether the funds have been transferred, or when investors will receive them.
While analysts have said for years that Venezuela will soon run out of cash to pay its debts, President Nicolas Maduro’s government -- and that of Hugo Chavez before him -- have made honoring the obligations an issue of national pride. And this isn’t the first time Venezuela has been late on making a payment. In November, there were delays of several days for various securities issued by state oil producer Petroleos de Venezuela SA.
“There is a joke that Venezuelans never arrive to a party at the time the invitation says,” said Ray Zucaro, a money manager at RVX Asset Management. “So people think -- hope -- they will pay it. On the other hand, their options are becoming fewer and far between, and maybe they are really running out of cash.”
So far, investors seem willing to wait things out. The $4 billion of bonds, which mature in 2027, rose 0.05 cent to 38.4 cents on the dollar at 10:50 a.m. in New York.