Venezuela

Venezuela’s opposition has hired veteran debt lawyer Lee Buchheit to help restructure the country’s more than $150 billion debt burden, suggesting it could take a tough approach to dealing with investors holding defaulted bonds, Reuters reported. Buchheit, a former Cleary Gottlieb attorney who has represented several governments in debt talks with bond investors, published an academic article last year suggesting ways for a future Venezuela government to minimize debt repayments.

The economic team of Venezuelan opposition leader Juan Guaido is pushing to ensure a $71 million interest payment is made on the nation’s last remaining bond not in default, Bloomberg News reported. On Wednesday, the opposition-controlled National Assembly’s finance commission approved a measure to vote next Tuesday on the disbursement to holders of state oil producer PDVSA’s notes due in 2020. The group of lawmakers recommended Congress support the payment. That’s because the bond is backed by a majority stake in Citgo, the Venezuelan-owned U.S.

President Nicolas Maduro is funneling cashflow from Venezuelan oil sales through Russian state energy giant Rosneft as he seeks to evade U.S. sanctions designed to oust him from power, according to sources and documents reviewed by Reuters. The sales are the latest sign of the growing dependence of Venezuela’s cash-strapped government on Russia as the United States tightens a financial noose around Maduro, who it describes as a dictator, Reuters reported.

As the political crisis in Venezuela rumbles on, a number of creditors are squaring up in what promises to be one of the most complicated debt restructurings in history, the Financial Times reported. What will make a workout so tricky to resolve is not just the amount of IOUs sitting on the balance sheet of the South American nation, the fourth-largest economy in the region, but the diversity of its creditor base. In recent months, some aggrieved lenders have filed lawsuits against the government and the state-owned oil company, PDVSA, sparking some unease from the rest.

As if muddling through a humanitarian crisis and a sharpening political stand-off between authoritarian Nicolás Maduro and opposition leader Juan Guaidó weren’t bad enough, Venezuela will soon have to wade through what is said to be one of the messiest debt restructurings in history, the Financial Times reported. What will make Venezuela’s forthcoming debt workout so difficult to resolve is not just the amount of IOUs sitting on its balance sheet, but the diversity of its creditor base. Like most metrics in Venezuela, these exact figures are difficult to come by.

The US is discussing emergency aid for Venezuela should the regime of Nicolás Maduro fall, including potential financial assistance alongside official loan programmes from the IMF and other institutions, the Financial Times reported.

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.

Venezuelan opposition leader Juan Guaido’s team of advisers is rushing to take control of the country’s main foreign asset, U.S. refiner Citgo Petroleum, before a potential bond default that could leave half the company in creditors’ hands, sources close to the talks told Reuters on Monday.

Venezuelan bond prices jumped to the highest in six months as large anti-government protests throughout the country spurred speculation that President Nicolas Maduro’s regime could be coming closer to an end, Bloomberg News reported. As Venezuelans took to the streets, the country’s $4 billion of defaulted notes due in 2027 surged 2.4 cents to 30.7 cents on the dollar, the highest price since June. Other overseas notes from the government and state-owned oil company joined along in a broad rally.

Creditors holding defaulted debt issued by Venezuela and its state-run oil company sent an envoy to Caracas for talks with the government’s legal advisers, according to two people familiar with the matter. A small U.S.