Venezuelan Debt Now Has the Vultures Circling
- 6 years ago
Venezuelan Debt Now Has the Vultures Circling
With the country’s political and social disarray, United States sanctions, and recent demands from the government of President Nicolás Maduro
that bond investors agree to a debt deal, Venezuelan bonds have plunged in price from over 30 cents to the low 20s.
“If you look at the behavior of distressed investors, they wait for the price to hit a
certain threshold” — usually 20 cents on the dollar — “and we have now reached that.”
Developments have moved quickly in recent weeks, with a call to restructure, missed interest payments, a default on a power company’s bonds
and an inconclusive meeting with investors on Monday.
The country’s foreign-exchange reserves have fallen below $10 billion — a level economists say comes close to insolvency —
and experts say striking a debt deal will not be easy, especially with an unpopular government and dueling legislatures.
With the country’s political and social disarray, United States sanctions, and recent demands from the government of President Nicolás Maduro
that bond investors agree to a debt deal, Venezuelan bonds have plunged in price from over 30 cents to the low 20s.
“If you look at the behavior of distressed investors, they wait for the price to hit a
certain threshold” — usually 20 cents on the dollar — “and we have now reached that.”
Developments have moved quickly in recent weeks, with a call to restructure, missed interest payments, a default on a power company’s bonds
and an inconclusive meeting with investors on Monday.
The country’s foreign-exchange reserves have fallen below $10 billion — a level economists say comes close to insolvency —
and experts say striking a debt deal will not be easy, especially with an unpopular government and dueling legislatures.