Venezuela Hires Rothschild as Financial Advisor to Analyze Foreign Debt Obligations
Venezuela’s government has reportedly enlisted the services of Rothschild & Co. as a financial advisor to conduct an assessment of its foreign debt obligations. This move is seen as a crucial step towards potentially initiating a restructuring of the country’s debt.
According to sources familiar with the matter, Rothschild is currently working to determine the extent of Venezuela’s debts and the entities to which they are owed. The exact details of the contract have not been disclosed publicly, with the individuals requesting anonymity to discuss the matter.
Estimates suggest that Venezuela owes approximately $154 billion to foreign lenders, including outstanding global bonds issued by both the government and the state-owned oil company, which have been in default for over six years. The country has been accumulating interest on these bonds along with court judgments for unpaid business loans.
Sovereign bonds are currently trading at around 20 cents on the dollar, while defaulted notes from Petróleos de Venezuela SA are trading at approximately 11 cents. The recent rebound in debt prices followed a plan unveiled by JPMorgan Chase & Co. in February to address securities in major emerging-market debt indices.
This development comes as President Nicolás Maduro’s administration seeks to reestablish ties with global markets, multilateral organizations, and credit ratings agencies after facing years of international isolation. While Maduro has previously expressed a willingness to work with creditors, talks in the past have failed to progress.
Notably, Washington does not recognize Maduro as the legitimate leader of Venezuela, and existing sanctions prevent the government from issuing debt in US markets. Any potential debt restructuring would require a change in these sanctions policies.
Tensions between the US and Venezuela escalated recently when the United States reimposed sanctions on the country’s oil and gas sectors, citing Maduro’s alleged failure to uphold commitments to conduct fair elections. In response, Venezuela accused Washington of breaching a political agreement signed in Doha last year.
Venezuela is gearing up for a significant election on July 28, where Maduro is expected to face off against opposition candidate, likely ambassador Edmundo González. The outcome of this election could have far-reaching implications for the country’s economic and political future.