Venezuela's creditors working on
eventual debt restructuring: source, 6/20/18, Reuters.
PARIS (Reuters) -
Venezuela’s public and private creditors are working on how to one day
restructure its debt, though U.S. sanctions make that impossible
for now, a source close to the Paris Club of government creditors said on
Wednesday.
Crippled by a
hyperinflationary economic crisis, the cash-strapped Venezuelan government and
state oil company PDVSA are in default on most of their $60 billion in
outstanding bonds.
Including debt owed to
other governments and official lenders, the OPEC member’s foreign debt is
estimated to stand at $140 billion, with China owed $20-25 billion and Paris
Club creditors $5.8 billion, the source said.
However, any
restructuring is all but impossible for now because of U.S. sanctions under
which that could be seen as illegal financing by Washington.
“Everybody, whether it
be the IMF, the private creditors or the official creditors, is preparing for
the day after, when it comes, when things become possible,” the source said.
“We can’t do anything now
because of the American sanctions,” the source added speaking after Paris Club
and private creditors met on Wednesday in the French capital to discuss a range
of issues, including Venezuela’s debt.
Any future restructuring is complicated by the
fact that some Venezuelan sovereign bonds and no PDVSA bonds are covered by
so-called collective action clauses, meaning a minority of bondholders could
have scope to hold out in a restructuring deal.
“The complexity of a
Venezuelan debt restructuring is an issue, the day that it happens. It will be
very, very complicated,” the source said.
Reporting
by Leigh Thomas; editing by Andrew Roche
Norb Leahy, Dunwoody
GA Tea Party Leader
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