LONDON, Aug 3 (Reuters) – Venezuelan dollar bonds and those of state oil firm PDVSA rebounded across the curve on Thursday, with gains of up to 3.8 cents after China backed its close ally.
The benchmark 2038 sovereign eurobond was up 1.5 cents to 36.8 cents in the dollar and state oil firm PDVSA’s benchmark 2037 bond rallied 3.1 cents to trade at 33 cents.
Other issues also made strong gains, with the sovereign 2022 bond up 2.8 cents and PDVSA’s 2035 bond up 3.8 cents.
The bonds have slumped to their lowest levels in over a year this week after elections for a controversial new assembly prompted the United States to slap sanctions on Venezuelan President Nicolas Maduro, branding him a dictator for seizing absolute power.
Criticism has come from Europe and other Western nations too and the sanctions have added to fears that a long-expected default could be drawing closer.
The bonds’ reversal on Thursday came after China backed Venezuela, saying it believed voting was “generally held smoothly”.
The European Union has declined to recognise the result of the election and said it was ready to “gradually step up” pressure on Maduro, although it has shied away from introducing sanctions. (Reporting by Claire Milhench)