Venezuela Is Late on $1.7 Billion and Bond Traders Are Stuck

(Bloomberg) -- It’s been more than three months since the first of more than a dozen Venezuelan bonds was declared in default, and the arrears keep stacking up.

Wall Street investors reluctant to give up hope they’ll eventually be paid are in limbo after the nation and its state oil company busted through grace periods on about $1.7 billion of debt payments, rating firms declared many securities in default and swaps that provide insurance against non-payment were triggered.

For now, everyone is just waiting. Creditors have yet to organize to formally seek compensation on the late payments, and fund managers who previously cycled through contacts from Caracas to Frankfurt seeking updates amid the government’s silence have resigned themselves to the fact that daily panic attacks aren’t worth the time or energy.

President Nicolas Maduro, who first called for a restructuring in November, said Thursday that talks are advancing “impeccably,” without providing any details. Several bondholders have told Bloomberg News there’s been no progress.

Some money managers still expect Venezuela to follow through on its principal payments, although it will be a long wait. The next maturity date is Aug. 15 for $753 million of sovereign notes. Venezuela’s bonds have gained a world-leading 13 percent this year, although much of the appreciation came from price markups after the Emerging Markets Traders Association recommended the notes trade without accrued interest.

Here’s the latest breakdown of the bonds in flux:

To contact the reporter on this story: Ben Bartenstein in Lima at bbartenstei3@bloomberg.net.

To contact the editors responsible for this story: Rita Nazareth at rnazareth@bloomberg.net, Daniel Cancel at dcancel@bloomberg.net, Brendan Walsh

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