As Venezuela struggles to make bond payments on time, about a dozen institutions holding the country’s debt are in the early stages of organizing themselves and meeting with attorneys, according to people with knowledge of the matter.
-
Some fund managers specializing in distressed debt smell an opportunity.
November 17 -
Active management supplemented by local knowledge cannot be easily manufactured or automated, an expert says.
July 31 -
The divergence between short- and long-term investors hasnt been this pronounced since October 2015.
March 14
The group — which isn’t yet an official committee — includes mutual fund managers Pimco, T. Rowe Price, Amundi Pioneer, Ashmore Group, AllianceBernstein, Fidelity Investments, BlackRock and Allianz, as well as the asset management arms of Goldman Sachs and HSBC. It also includes hedge fund firms Greylock Capital Management, Autonomy Capital, and Warlander Asset Management, said the people, who asked not to be identified because the talks are private.
The mutual fund investors are among the biggest holders of debt issued by either Venezuela or its state oil company, Petroleos de Venezuela, according to filings compiled by Bloomberg, which represent about a fifth of the total debt outstanding. Both Ashmore and Autonomy have funds that are specifically dedicated to investments in Venezuela.
Emerging markets, value and small-cap funds dominate the list, but other factors need to be considered, as well.
The efforts to organize come amid significant bond payment delays that led ratings companies to declare the nation and its state oil company in default. While the government said earlier this month that it will seek to restructure its debt with global investors, officials have also insisted that the nation will keep paying its obligations while it sorts out a plan with creditors. Coming up with a solution will be particularly challenging because of U.S. sanctions that restrict investors from engaging with some top officials and purchasing new debt.
The group met Nov. 20 with Rich Cooper, a partner at Cleary Gottlieb Steen & Hamilton, and Mark Walker, the head of sovereign advisory at Millstein, and is entertaining proposals from other attorneys as well. The Institute for International Finance, which hosted a call for creditors earlier this month, has begun to serve as liaison between the group and the U.S. Treasury Department.
Representatives for the firms either declined to comment or didn’t immediately reply to a request for comment.
