MARKET VALUE OF VENEZUELAN GOVERNMENT JUNK BONDS INCREASES TO 40-50%, AFTER THE COUNTRY'S FINANCE MINISTER ANNOUNCES A "COMPREHENSIVE AND ORDERLY PROCESS" FOR RESTRUCTURING SOVEREIGN AND OIL COMPANY DEBT

Venezuelan government bonds, of which approximately USD$150bn are in default, are to be exchanged for new government obligations, according to an announcement made on May 13, by the country's Economics and Finance Ministry. On the basis of this positive official news, the market value of the bonds has reportedly soared to as high as 50% of face value, according to speculators known to be investing in those instruments. Previously, the market only supported 20-30% sales.

The ministry spokesman stated that holders of the bonds would most likely have to take an up to fifty per cent "haircut," or discount, when the replacement bonds are exchanged for the original instruments, which will have a 10-20 year maturity; more details are expected to be released later this month.