Asset manager Aberdeen cuts Venezuela’s bonds after a stunning rally

Asset manager Aberdeen Investments is “winding down” its holdings of Venezuelan government bonds, a portfolio manager told Reuters, following a stunning rally that has more than doubled the price of the country’s defaulted bonds in the past 12 months. “The tail risk seems quite high,” Kevin Daly, portfolio manager at Aberdeen Standard Investments, told Reuters. ‘We’re scaling back a bit. I think it’s wise to reduce some of the risk here.”

Defaulted debt instruments rose as much as 10 cents on Monday, the first day of trading after the US seized President Nicolas Maduro in a weekend operation.

These gains contributed to returns of almost 100% last year, fueled by investor hopes that US President Donald Trump’s return to the White House could lead to a regime change that could trigger a long-awaited debt restructuring.

Data from MarketAxess shows that trading in Venezuelan bonds – and those of state oil company PDVSA – rose 1.174% on January 5 and 6 compared to the 2025 daily average on its platform.

On Friday, the bonds rose again in value, with the 2031 maturity adding 1.2 cents, bringing the bid for the ‍dollar to 42.59 cents. Broadly speaking, the national debt fluctuates between 35 and 43 cents.

Despite Maduro’s departure, debt restructuring remains difficult; Venezuela and its top officials remain under U.S. sanctions, so even talking to officials is prohibited without a waiver or authorization from the U.S. Treasury Department. And even once the conversations start, the

estimated debt pile of $150 to $170 million

– which includes bonds, arbitration claims, bilateral loans and legal battles over previous government appropriations – is daunting.

“There is unlikely to be a further rally until investors anticipate or become more optimistic about the prospect of a licensing breakthrough,” Daly said.