In the past decade, Venezuela and the nation’s oil company Petroleos de Venezuela SA have sold $65 billion of dollar-denominated bonds without ever seeing a dime. “It’s very clear to anyone who looks at Venezuela that its economic deterioration has accelerated in the last year or year and a half,” Colm McDonagh, who manages a $1.3 billion emerging-market debt fund at Insight Investment Management, said by phone. “There seems to be a scarcity of dollars and a lack of transparency about dollar resources Venezuela has.” “The cost of default is so significant for Venezuela specifically that the cost of debt service pales into insignificance,” he said. “There are 35 or 40 ships out there floating around the world every day. If you default, they are going to get attached. If you don’t have access to capital markets and you don’t have access to dollars, your economy would implode.” goo.gl/UOhVIJ
Posted on: Tue, 07 Oct 2014 16:49:43 +0000
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