Venezuela to Issue up to $6bn in 2011

Venezuela is expected to issue an additional $5bn-$6bn in debt between Pdvsa and the Republic, according to a report by JPMorgan. “We would not expect a fundamental change in the overall policy framework that uses excessive USD issuance to locals to help prop up an overvalued FX rate until after the 2012 elections,” the bank says in the report. New bonds are expected to come wide by as much as 100bp. The 5.3 implied exchange rate requires the sovereign to issue relatively high-priced dollar bonds, though the finance ministry could potentially balk at the need for high coupons, according to the report. Pdvsa reopened $1.8bn of its 2013 bonds at the end of June, just weeks before paying the remaining $2.45bn maturity on its 2011s.