BAHAMA BRIEFS-Rundown from IDB Annual Meeting 2016

viernes 8 de abril de 2016 15:49 GYT

By Paul Kilby and Davide Scigliuzzo

NASSAU, April 8 (IFR) - While tourists clad in flip flops and T-shirts enjoyed the sun and crystal blue waters of the Caribbean, bankers dressed in suits and ties attended to more serious business during the second day of the IDB meetings in Nassau on Friday.

Topics at hand included default concerns in Venezuela, the development of local markets and the execution of Argentina's jumbo bond sale later this month.

Just as Argentina is poised to cure its long-standing default, attention is quickly turning to Venezuela.

The oil rich nation could soon face its own default scenario later this year when its state-owned oil company PDVSA faces some US$3bn in maturity payments.

"It risks making the Argentina look like a picnic," Graham Stock, head of EM sovereign strategy at BlueBay Asset Management, said at a LatinFinance breakfast on Friday.

Whether the state-owned oil company can win some breathing space through a debt exchange that will satisfy current holders remains a moot point.

A successful liability management transaction that is positive from a net present value perspective for investors is likely to come with a high cost as amortization deadlines draw closer.

Many market participants agree however that the Venezuelan government will likely react to a default differently from the recalcitrant Kirchner administration of Argentina which was embroiled in a decade-long legal battle with holdouts.   Continuación...