Venezuela's Bonds May Be Worth Nothing or Make Investors a Mint

Distressed-debt investors are deeply divided when it comes to how much bondholders can recover after a Venezuelan restructuring, Bloomberg News reported. Doomsayers argue that a nation suffering Latin America’s worst humanitarian catastrophe has greater concerns than paying investors. Harvard economist Ricardo Hausmann, an informal adviser to U.S.-backed National Assembly leader Juan Guaido, has said creditors must take a big haircut. Jay Newman, the former hedge fund manager who specializes in distressed debt, has previously said that bonds from state oil giant PDVSA "could be a zero." Optimists point to a country with the world’s largest proven oil reserves, the likelihood of a big bailout from the International Monetary Fund and foreign investment that could catalyze growth under a new government. Read more

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