Venezuelan President Hugo Chavez’s pledge to withdraw from the International Monetary Fund may violate terms of the country’s foreign bonds, allowing investors to demand their money back.
Pacific Investment Management Co. and Alliance Capital Management, the biggest holders of Venezuela’s debt, are the biggest among dozens of investors, writes Bloomberg.com
They could get a $404 million (2,3 mia. d. kr) windfall (overraskende indtjening, red.) if the securities are redeemed because they own bonds that trade below face value, according to data compiled by Bloomberg.
Chavez’s decision to take over telecommunications and energy companies this year has made Venezuelan bonds the second worst performers in emerging markets.
The South American country promised when it issued the bonds to remain in the IMF, so exiting the Washington-based organization would trigger a so called technical default.
Chavez may back down because a default would curb Venezuela’s ability to borrow in international markets and eliminate the IMF as a potential source of funds.
