Venezuela Selloff Worsens as U.S. Oil Exports Sink: Andes Credit

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http://washpost.bloomberg.com/Story?docId=1376-N0G2EP6KLVR901-018GVHAHPMNAI2NDVQPQFE69GL



Feb. 4 (Bloomberg) -- Venezuela’s plummeting oil sales to the U.S., its biggest export market, are exacerbating a collapse in the nation’s debt securities.

Bonds issued by Venezuela sank 3 percent on Jan. 31, a day after data released by the U.S. Energy Information Administration showed that 2013 energy sales to the country are headed for a 28-year low. The selloff pushed losses this year to 12.4 percent, more than three times the average 3.93 percent drop among notes from the least creditworthy developing nations, according to data by Bloomberg.

The tumble in oil exports, Venezuela’s biggest source of dollars, comes as President Nicolas Maduro faces a shortage of U.S. currency that’s caused consumer prices to soar 56 percent and foreign reserves to plunge to a decade-low of $21 billion. Petroleos de Venezuela SA, the state-run oil producer known as PDVSA, is sending hundreds of thousands of barrels a day to China to repay loans totaling more than $40 billion since 2008, at a time when its production is shrinking.

“It’s an indictment of the mishandling of PDVSA,” Edwin Gutierrez, who manages $10 billion of emerging-market debt at Aberdeen Asset Management Plc, said in a telephone interview from London. “The country’s capacity to pay continues to deteriorate.”