Venezuela’s president yesterday said that the cash-strapped South American country will seek to restructure its debt, raising the prospect of a showdown with bondholders that could be complicated by U.S. sanctions on key members of the Venezuelan administration, the Wall Street Journal reported today. In a televised address yesterday, President Nicolás Maduro announced plans to make a $1.1 billion principal payment today for a bond issued by state-owned oil company Petróleos de Venezuela, S.A. that was due Nov. 2. He added that following Friday’s payment, he would seek a voluntary restructuring of the country’s remaining debt. Estimates of Venezuela’s total outstanding debt vary, with some analysts putting the figure between $100 billion and $150 billion. The development follows years of increasingly restricted financing options for Venezuela. In August, President Donald Trump issued an executive order prohibiting U.S. institutions from trading new bonds that would serve to help finance Maduro’s government, a move aimed at punishing the regime for what the Trump administration called human-rights abuses and state-led corruption. The sanctions also could make a debt restructuring difficult or even impossible, according to some sovereign debt restructuring attorneys, because they restrict bondholders’ dealings with Venezuelan officials. Venezuela has many and varied creditors who are likely to scramble for limited assets in complicated legal battles in the event of a restructuring or default, some of the attorneys said.
