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Bondholders wait for debt talk details from Venezuela

Sep 11, 2017

Sources say officials from Venezuela's Finance Ministry are expected to schedule calls with investors this week

Peter Agra

Keywords: venezuela bonds cross-border bonds liability management exercise

Venezuelan President Nicolas Maduro has invited bondholders to talk about the impact of US sanctions on the country's debt.

However, despite the invitation, Venezuela has yet to schedule any calls with bondholders, a fixed income investor told LatinFinance.

"There's nothing to discuss," another investor said, adding that Venezuela is edging closer to a default.

Sources said officials from Venezuela’s Finance Ministry are expected to arrange calls for this week. 

Venezuela has voiced a commitment to meeting its debt obligations, but with only $3bn to $4bn in non-gold reserves and $2.8bn in interest payments due this year and $7bn in 2018, the country will likely have to restructure some if its outstanding debt, sources said.

Venezuela is said to be discussing restructuring options with Russia. The South American nation owes Russia around $3bn, excluding loans from the Russian state oil company Rosneft to its Venezuelan counterpart PDVSA. The country is also considering a debt exchange with China.

In July, PDVSA canceled calls to reassure investors about the company's ability to make its bond payments.

Fitch Ratings last month downgraded Venezuela to CC from CCC, after the US government barred banks from dealing in new debt and some existing bonds from the oil producing nation. Fitch also downgraded six commercial banks in Venezuela – Bancaribe, Banesco, BNC, BOD, Exterior and Mercantil.



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