‘Lost Cause’ Company Bond Doubles Amid Venezuela All-Out Rally
Power lines run through transmission towers in Maracaibo, Zulia state, Venezuela.
Photographer: Carlos Becerra/BloombergA defaulted bond issued by an old Venezuelan power company and long regarded as a lost-cause by investors has almost doubled in value this year as investors look for ways to profit from Venezuela’s new-found rapport with the US.
The notes, issued by Electricidad de Caracas, or Elecar, have leaped 98% to about 31 cents on the dollar since December, according to Trace data, triple the return on any other corporate debt in Latin America. That has handed outsize gains to investors like Grantham Mayo Van Otterloo & Co. LLC, which has owned around a quarter of the debt for many years.