🇻🇪 Venezuela Bonds Become the Hottest Trading on Wall Street, but Risks Remain High

🔹 Venezuela's October 2026 maturity bonds surged to around 43 cents per USD, more than double compared to August.

🔹 The rally is driven by expectations of faster-than-anticipated political transition and the potential restructuring of debt after Nicolás Maduro's arrest and changes in US policy.

🔹 Venezuela defaulted at the end of 2017, with total government and PDVSA debt obligations nearing $100 billion, equivalent to about 119% of GDP. PDVSA is Venezuela's state-owned oil company, controlling all exploration, production, refining, and export of oil and natural gas.

🔹 Major organizations like Fidelity Investments and T. Rowe Price are holding large amounts of these bonds.

🔹 Barclays upgraded Venezuela bonds to a neutral rating but warned that upside potential may be limited.

Note: The level of ~43 cents is still below the original (par) value because par is 1 USD, so the bonds are trading below par, meaning they are at a discount compared to the face value.
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