Venezuelan Government and Creditors Meeting Ended without Agreement

HAVANA TIMES — The meeting between the Venezuelan government and bondholders of Venezuela’s foreign debt ended Monday without an agreement, even though the government stated that the process of renegotiating to find better payment conditions has had a “postivie” start, reported dpa news.

In an announcement, the Maduro government pointed out that the meeting marked the beginning of the process to renegotiate its foreign debt and that of the country’s state-run oil company, PDVSA.

The meeting took place in Caracas where investors didn’t receive a formal proposal from the presidential committee responsible for the negotiations, according to statements from dpa’s official sources.

Bondholders and representatives from investment banks came to the meeting in order to hear out a proposal for renegotiating foreign debt, after President Nicolas Maduro had said that he will look for an agreement in order to improve future payment conditions, even though he has denied that Venezuela is in default.

At the meeting behind closed doors, not all 414 investors who hold what are called “sovereign bonds” and those of the PDVSA state-run oil company, showed up, in spite of Maduro saying, in advance, that all of them would be present.

The vice-president, Tareck El Aissami, led the official committee that welcomed bondholders from the United States, Panama, the UK, Portugal, Colombia, Chile, Argentina, Japan, Germany and Venezuela.

Meanwhile, he described the meeting as being “highly positive” and highlighted the fact that Venezuela has “fully” honored its commitments. However, he pointed out that the economic situation has changed.

“There is an economic blockade that is trying to stifle the Venezuelan economy. Today, Venezuela is limited in looking for funding and we need to contemplate new ways to come out of this situation,” El Aissami said, who is being sanctioned by the US Department of the Treasury for alleged drug trafficking charges.

El Aissami also said that in the past 36 months, the country has paid on its debt both for capital and interest 73.359 billion USD and, however, the “immediate result” has been that rating companies, who are being “craftily” used against Venezuela, have increased the country’s risk level.

The economist Asdrubal Oliveros, from the analysis firm Ecoanalitica, said that no concrete plan to restructure the debt was presented at the meeting and the Government took the opportunity to denounce US sanctions.

However, the Venezuelan government has said in an announcement that the refinancing process began “with overall success”, as part of a strategy to “fully” comply with the country’s obligations, in spite of the Office of Foreign Assets Control’s (OFAC) attempts to stop this, which is a branch of the US Department of Treasury.

Meanwhile, the Government has stated that US sanctions against Venezuelan officials seek to drag out the payment of commitments “that go beyond the problems we are currently experiencing and the blockades that are trying to be inflicted with malicious intent.”

The national debt and that of PDVSA that needs to be refinanced is more than 90 billion USD, nearly half of the country’s total foreign debt.

One of the largest creditors is the US investment bank Goldman Sachs, with bonds worth a total of 2.07 billion USD.

Until now, the Government had paid all of its debt obligations on time, but the plunge in oil revenue and the hardship of a sagging economy with high inflation has forced them to seek other payment conditions, with extended periods of payment, at a time when Maduro is looking to be reelected in the 2018 presidential elections.