Venezuela Limits Allocations, Supply

By placing about 60% of its new $3bn 2026s among public sector banks, Venezuela is in effect limiting short-term supply damage in the international markets as much of the paper will be drip fed through the country’s FX platform, or Sitme, says Barclays. “…[banks] are expected to sell this bond to the central bank so that it can resell it through the Sitme,” the shop noted Monday after the government released the final results of the transaction. While international investors may be relieved that supply will be limited, the government’s strategy is less positive for Venezuelans which will receive fewer hard currency assets than they might have expected and will suffer from further upward inflation pressures as a result, it added. Public financial entities were allocated 100%, while insurance companies got about 82% of what they bid on. Pricing on the 11.75% bond was set last week at 95 last week. Credit Suisse acted as sole lead manager and coordinating agent along with Evorfinance Mosnarbank.