Venezuela Bonds Still Have Upside, Morgan Stanley Says

Bonds from Venezuela and its state-oil company still have upside after Tuesday’s gains following the US Treasury announcement it’d allow the government to higher legal and financial advisory for a potential debt restructuring, according to Morgan Stanley.

• In the firm’s base-case restructuring scenario, sovereign bonds still have a 9% upside and PDVSA bonds have 16%, Morgan Stanley strategist Simon Waever wrote in a Wednesday note
• Next catalysts will likely come from boosting oil production, improving macroeconomic data and institutions, though momentum is likely to slow, he wrote
• “The license does not authorize the actual restructuring or even direct negotiations between ...