BANCTRUST PLANS BOND INVESTOR TRIP TO VENEZUELA AFTER ELECTION

(Bloomberg) -- Investment bank BancTrust & Co. is organizing a rare trip to Venezuela for investors who hold some of the nation’s $60 billion in defaulted debt, according to people familiar with the matter.  

The trip, which is drawing interest from both US and European firms, will be held in September, according to the people, who requested anonymity discussing a private matter. The agenda and list of potential attendees won’t be finalized until after Sunday’s presidential election, the people said.  

A representative for BancTrust didn’t reply to a message seeking comment. 

The excursion shows how Venezuela, long a pariah in international markets, is gaining traction as investors bet the election will usher in sweeping relief from economic sanctions, setting the table for an eventual debt restructuring. 

Bonds have sat in default for nearly seven years and change hands for less than 20 cents on the dollar. The lack of movement on the prices suggests the market expects President Nicolas Maduro to remain in power following Sunday’s vote against the opposition’s candidate Edmundo Gonzalez. 

Regardless of who wins, though, an election that’s perceived as free and fair may prompt the Biden administration to lift sanctions. A win by the opposition, may help push that timeline forward and improve bond recovery prices.  

BancTrust analysts expect bonds to rally as much as 5 cents in the scenario in which the opposition and the government strike a post-election compromise, averting violent clashes. They assign only a one-in-five probability of that scenario. 

Whenever the restructuring process begins, there is little expectation it will be swift or easy. The government has hired Rothschild & Co. to map out the country’s debt, a $150-billion mix of bonds, commercial loans, bilateral commitments, arbitration awards, past-due interest and other liabilities, according to private estimates.

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2024-07-26T16:32:47Z dg43tfdfdgfd