The Biden administration’s rollback of sanctions against Venezuela is offering a helping hand to bondholders owed $63 billion from the government in Caracas, many of whom haven’t been paid a dime in nearly six years, WSJ Pro Bankruptcy reported. Since the Biden administration loosened sanctions on President Nicolás Maduro’s government last week and allowed U.S. investors to once again buy and sell Venezuelan debt, trading in the South American country’s sovereign bonds has intensified and prices are rallying. Traders estimate that between $2 billion and $3 billion of Venezuelan government bonds have traded hands in the week since the ban was lifted. The easing of sanctions has investors anticipating the return of Venezuela’s debt into major emerging market bond indexes and a long-awaited restructuring of Venezuela’s $63 billion in sovereign debt, which has been buoying Caracas’s bond prices from recent lows of 10 cents on the dollar. In the nearer term, creditors are also preparing to cash in on a court-supervised sale of Venezuela’s shares in Citgo Petroleum, the major U.S. oil producer and refiner that the country bought in 1990 to gain a foothold in the U.S. oil market. The Biden administration indicated earlier this year it wouldn’t protect Citgo from Venezuela’s creditors if it were seized to pay them back.
