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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