JPMorgan Debt Indices Resume Venezuelan Bond Position

(CTN News) – JPMorgan will re-include Venezuela’s sovereign bonds and state oil company PDVSA bonds in its rising market bond indices starting in April.

In a three-month phase-in period from April 30th through June 28th, Venezuelan sovereign and Petroleos de Venezuela S.A. (PDVSA) bonds will be included in EMBI Global/Diversified benchmarks.

In this step, Venezuela will issue 20 sovereign and quasi-sovereign bonds totaling $53 billion in nominal value.

This follows the US Treasury Department’s decision to lift the almost 4-year ban on US investors trading Venezuelan debt on open markets in October. Consequently, the bonds were put on “watch” for possible restatement.

EMBI indices serve as the primary global benchmark for dollar-denominated bonds issued by developing market nations. Funds will likely buy these bonds since Venezuela’s weighting in these bonds is estimated to be 58 basis points in EMBI Global Diversified and 69 basis points in EMBI Global.

As a result of US sanctions, Venezuelan bonds have a zero weighting since 2019.

Hans Humes, co-chairman of the Venezuela Creditor Committee and co-founder of Greylock Capital Management, said, “JPMorgan didn’t have much wiggle room.”

In addition, he said, if you take the weighting to zero when sanctions are applied, you must lift it again when sanctions are lifted.

Before taking this step, JPMorgan consulted more than 100 asset managers.

Venezuela has never been scared by US sanctions

“We must rely on our own creativity, minds, ideas, work, strength, and capacity for innovation,” Venezuelan President Nicolas Maduro said during his weekly program on February 20.

The bonds have been weighted zero since the US imposed sanctions on Venezuela in 2019.

Hans Humes, co-chairman of the Venezuela Creditor Committee and co-founder of Greylock Capital Management, said, “JPMorgan didn’t have much wiggle room.”

In addition, he said, if you take the weighting to zero when sanctions are applied, you must lift it again when sanctions are lifted.

Over 100 asset managers were consulted before JPMorgan made this decision.

Venezuela has never been intimidated by US sanctions

In his weekly program on February 20, Venezuelan President Nicolas Maduro described the US as entirely unreliable, saying, “We must rely on our own creativity, minds, ideas, work, strength, and innovation.”.

BRICS will soon be expanded to include Venezuela, JPMorgan, Maduro said, emphasizing the unavoidable shift toward a new global order.

Further, the Venezuelan President emphasized that no threat, warning, or sanction could stop the Venezuelan people, who “fought against colonialism and to end hegemony.”

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