Venezuela’s acting president, Delcy Rodríguez, announced on May 13 that the government would begin a process to restructure the country’s foreign debt, after the U.S. Treasury Department “eased restrictions” and the IMF resumed its relationship with Venezuela. To lead the negotiation process, the government hired Centerview Partners, a Wall Street “financial boutique” firm, at the request of the U.S. government.
It is all part of the package that the Trump administration has been implementing since the invasion on January 3 of this year, when it kidnapped Venezuela’s constitutional President, Nicolás Maduro, and his wife, Cilia Flores.
Since at least mid-February, two executives from Centerview Partners’ Paris office—Matthieu Pegasse and Charles Albient—traveled to Caracas to establish relations with Venezuela’s interim government. Both financiers previously worked at Lazard Frères before joining Centerview. Cuban-American Mauricio Claver-Carone—Marco Rubio’s buddy—boasts of having been the one who introduced the firm to the negotiations and of being the one who unofficially directs everything; those at Centerview deny this.
As a preliminary step to the negotiations, the IMF announced on April 16 the resumption of its relationship with the Caracas government, which had been suspended since 2019, when the IMF refused to recognize Venezuela’s constitutional government. Then, on May 5, the Treasury Department issued General License 58 so that creditors could negotiate without violating OFAC sanctions, which allows for the initiation of contacts between creditors and the government, but does not yet allow for any concrete agreements.
Since the Obama administration began imposing sanctions on Venezuela in 2017, the Venezuelan economy began to collapse, leading the country to declare a default on its sovereign bonds. The economic crisis worsened with the total financial siege imposed by the Trump administration from its first term onward, which ultimately brought the country’s economy to its knees. It had begun to recover, thanks to the support of the BRICS countries, particularly China, Russia, and Iran.
There are no precise figures on the “actual” amount of Venezuela’s foreign debt, and this has been used as a pretext for the IMF to step in as a guarantor of the process. According to data used by the Venezuelan-American Chamber of Commerce (Venancham), Venezuela’s foreign debt is broadly divided as follows:
1) Public debt, mainly consisting of sovereign bonds issued by Venezuela between 1997 and 2012. Some of these bonds are or were held by institutional investors and have since ended up in the hands of “vulture funds.” It is estimated at approximately $31 billion.
2) Debt of the state-owned oil company, PDVSA through bonds issued before 2013, which are in the same hands as the sovereign debt, that is, investment funds and vulture funds. It is estimated at approximately $27 billion.
