GENEVA--(BUSINESS WIRE)--According to the latest financial outlook for Venezuela released today by the hedge fund Adar Capital Partners, this country will continue repaying its debt normally as it has done since 2014, repaying $32.4 billion of capital. In the event that Venezuela should have no access to international markets in 2017, it would only need to pay off $6.6 billion, admittedly a large number, but not so great given Venezuela's size and potential.
According to Diego Marynberg, Portfolio Manager at Adar Capital, "since the beginning of the second half of 2014, when the price of oil began shooting down from over $100 per WTI barrel to its minimum of $26 in March this year and its recovery to its current level of $45-50 dollars, markets have set prices based on the expectation of a debt default by Venezuela and its main oil company Petróleos de Venezuela, S.A., but they were wrong".
The Adar Capital report argues that for two years investors have been discounting debt issued by the Republic of Venezuela and by Petróleos de Venezuela, S.A. by more than 30% p.a. on bonds maturing in 2022 or earlier, with interest rates of 20% or more for the rest of the bonds. As a country dependent on international trade and in which the state is the leading exporter and importer of goods, Adar Capital does not expect there to be a default, given the catastrophic impact this would have domestically.
In Marynberg's opinion, "in the most adverse circumstances imaginable, President Maduro has shown an attitude of absolute responsibility and pragmatism, making each payment of both capital and interest as they became due, and reducing the country's external debt".
About Adar Capital Partners
Founded in 2011, Adar Capital Partners Ltd. provides investment advice to institutions, family offices and private equity funds mainly in Latin America and Europe. It currently manages total assets of $1.3 billion and its Adar Macro fund has hit $850 million. Bloomberg Ticker: ADARMAA KY. http://www.adarcapitalpartners.com