Venezuelan newspaper El Nacional has reported that Citibank, N.A. resigned from its position as principal payment agent on a number of PDVSA-issued bonds.

The press report indicates that Citibank began informing the market of its position on July 14, 2016.  The bank informed PDVSA and investors that, according to section 8.03 of the contract it signed with PDVSA, the state-held oil company “must promptly appoint a successor Principal Payment agent…”

According to El Nacional, Citibank was required to notify holders of PDVSA 2016, 2017N, 2021, 2022, 2024, 2026, and 2035 bonds. The bank acts as payment agent for all of those instruments.

El Nacional reports that Citibank’s notification does not include an explanation for the decision.

IPD does not deem Citibank’s resignation, in and of itself, an impediment to PDVSA’s ability to service its debt through the end of 2016. We expect that PDVSA is already in discussions with other financial institutions to assume Citibank’s role. Given the July notification date, the market does not appear to have reacted negatively to Citibank’s resignation.

The El Nacional article can be downloaded here:

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