U.S. sanctions imposed on Venezuela last week put limits on new debt from the country. But the Treasury Department’s move is having broader consequences in the bond market, where brokers taking a cautious stance are limiting trades in existing notes.
Depository Trust Company, a custodian for more than $35 trillion of securities, temporarily put a block on services for Venezuelan bond trades, and some dealers have also stopped buying and selling the debt. Meanwhile, prices have fallen to near the lowest in a year and rating agencies are cutting the credit ever deeper into junk territory. The CC grade for Venezuela at Fitch Ratings is the worst in the world for any country that isn’t in default.
Read more at Bloomberg Markets
