December 13, 2017 / 3:45 PM / 2 years ago

PDVSA bonds initially valued at 19.25 cents at CDS auction

NEW YORK, Dec 13 (IFR) - Bonds of Venezuela’s PDVSA were valued at 19.25 cents on the dollar in the first stage of an auction Wednesday to determine the payout on credit default swaps tied to the state-owned oil company.

That would mean buyers of the swaps - which are essentially insurance against bond defaults - would get a payout on their contracts of 80.75 cents on the dollar.

The final value will be released by auction administrators Creditex and Markit at 2pm New York time, after the second part of the auction process is completed.

A similar auction Tuesday set the payout on CDS contracts tied to Venezuela’s sovereign bonds at 75.5 cents on the dollar.

A committee organized by the International Swaps and Derivatives Association (ISDA) declared Venezuela and PDVSA in default last month, after the country failed to make timely payments on some of its bonds.

The face value of net CDS contracts outstanding on Venezuela’s sovereign bonds is around US$1.3bn, according to data from Depository Trust & Clearing Corporation. On PDVSA, the net outstanding is around US$250m. (Reporting by Davide Scigliuzzo; Editing by Marc Carnegie)

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