Venezuelan Bonds Surge Amidst Maduro's U.S. Capture

Venezuela's government bonds spiked following President Nicolás Maduro's capture by the U.S. This unexpected event has fueled optimism about tackling one of the largest sovereign debt restructurings. Bonds from both the government and state oil company, PDVSA, soared, reflecting a possible recovery as analysts predict future gains.

The capture of Venezuelan President Nicolás Maduro by U.S. forces has sent shockwaves through financial markets, causing a substantial surge in the country's default-stricken bonds. On Monday, bonds tied to Venezuela's government and its state oil firm, PDVSA, climbed significantly, gaining up to 8 cents on the dollar, or roughly 20%, during early European trading.

This unexpected development has sparked optimism around what could become a historic and complex sovereign debt restructuring. Analysts at JPMorgan have highlighted the bounce-back potential of these bonds, predicting further increases following a year where they nearly doubled in price under increased U.S. military pressure on Maduro's regime.

Tradeweb data showed Venezuela's 2031 bond approaching 40 cents on the dollar, with other bonds and PDVSA's debts also rising. Despite ongoing defaults on debts amounting to around $60 billion, and additional obligations pushing the total debt to approximately $150 billion to $170 billion, analysts see room for continued recovery.

(With inputs from agencies.)