For two months the Government was “thinking” about issuing a bond for PDVSA. Last week it finally announced it, but:
1) It was too large an issue
2) It was only aimed at corporations
3) It was not registered abroad
4) It was forbidden to be traded in US$
5) The scheduled seemed to ignore i) Monday was a banking holiday, Friday was a stock market holiday in Wall St.
i) First the Government decided to let individuals participate
ii) Then it changed the schedule
iii) Then it allowed it to be traded in US$
iv) Finally, yesterday it said it would register in the international markets.
–It is issued under Venezuelan Law, not under international regulations (PDVSA bonds were issued in 2007 under Reg S), international investors will not be as interested.
–Friday is still a holiday in the US and Thursday is half a holiday for fixed income markets.
–It is still too large at US$3 billion.
Thus, the bond remains a strange animal and will yield more than already existing PDVSA bonds. I will create indigestion in international markets as Venezuelans sell it abroad.
Ask your broker to give you a price such that:
1) The bond yields more than 22%
2) You are buying dollars at or below Bs. 6 per US$
Better yet, do nothing, but next Monday or Tuesday buy the bond in US$ in the international markets as it gives you a yield (Yield to Maturity) of over 22% per yea for the next two years.
Issuing these bonds should be simple, the people managing it are simply brainless, so we go from Petrobono to Petrobrainless.
That is what the robolutionary PDVSA is all about.