“Venezuela ticks both boxes,” he wrote in a note. “With a higher likelihood of a more pragmatic approach toward Venezuela, asset prices are reflecting an increased probability of debt restructuring.

 

Trump Deal With Maduro Sends Venezuela Bonds to Six-Month High

• Sides reached agreement on deportations, prisoner release
• Sovereign notes maturing in 2027 rise above 20 cents

This photo released by Venezuela’s presidential press office shows Venezuelan President Nicolas Maduro, right, shaking hands with Richard Grenell, US President Donald Trump’s special envoy, at Miraflores presidential palace in Caracas, Venezuela, on Jan. 31, 2025. Behind is Jorge Rodriguez, president of the National Assembly.Source: Venezuela’s Presidential Press Office

By Bloomberg News

3. Februar 2025 at 18:01 MEZ

Venezuela bonds jumped after the government reached a deal with the White House, adding to optimism that President Donald Trump’s administration is softening its stance toward the political foe.

Government dollar notes rose across the curve on Monday, with those due in 2027 crossing above 20 cents on the dollar for the first time since July. Venezuela has been in default since 2017 on a debt pile estimated to top $150 billion, including some of the most distressed government bonds in the world.

The recent rally — a jump of 3.5 cents since Trump took office — got a boost after Caracas agreed to release six imprisoned US citizens and to accept the return of undocumented immigrants. The White House Envoy for Special Missions Richard Grenell met with President Nicolas Maduro on Friday to finalize the deal.

Read more: Venezuela to Receive US Deportees After Trump Envoy’s Visit

The agreement represented a “sign of good political faith,” said Bruno Gennari, a strategist in KNG Securities. The possibility of levies on Mexico and Canada could also boost investor sentiment, as Venezuelan oil becomes an alternative energy source.

The decision to pick Marco Rubio, a staunch Maduro critic, as secretary of State triggered fears last year around a return of the “maximum pressure” strategy Trump deployed against Venezuela in his first term. Bond prices retreated as hopes faded for a political deal that would pave the way for an eventual debt restructuring.

That has changed since Trump took office and Grenell quickly opened talks with Caracas, which investors took as a signal of a different approach this time around.

“We did expect that the first decision of the Trump administration would not be to break bridges,” said Francesco Marani, head of trading at Spanish investment firm Auriga Global Investors SV SA.

Trump has continued to call for a democratic change in Venezuela, pointing to Maduro’s fraudulent election victory in July.

However, stemming migration and limiting China’s influence are objectives for the Trump administration in Latin America, said Ricardo Penfold, managing director at Seaport Global.

“Venezuela ticks both boxes,” he wrote in a note. “With a higher likelihood of a more pragmatic approach toward Venezuela, asset prices are reflecting an increased probability of debt restructuring.”