After ten years of recession and debt defaults, the ousting of the “Nicolas Maduro” regime with US support has revived creditors’ hopes, transforming the restructuring of Venezuela’s debt from a mere wish into a possible opportunity, coinciding with a noticeable rise in Venezuelan bond prices.
However, the restructuring process faces significant obstacles, as Venezuela’s debt is estimated at more than “$150 billion,” distributed among commercial bondholders, arbitration claims filed by global companies, bilateral debts, most notably the accumulated dues to China. Also, the “ongoing US sanctions” hinder any real progress, especially with their continued imposition on some government officials.
Experts emphasize that the journey is still long and arduous, due to the absence of official economic information for years, in addition to the significant political risks. Washington is likely to take on the direct guarantor role for the restructuring process, instead of relying on the International Monetary Fund, in order to facilitate investments by American oil companies in the country.
Political risks and unstable economic conditions remain the main obstacles to any way to restructure Venezuela’s debt, making this type of investment risky.
