Venezuela Prepares Debt Restructuring After Decade of Isolation

The country’s interim president, Delcy Rodríguez, is seeking to reach an agreement with creditors by the end of the year. Analysts estimate that such a deal could open the way for Venezuela to return to international financial markets after nearly a decade of isolation.

The U.S. investment bank Centerview Partners helped prepare a plan to bring Venezuela’s debt to a sustainable level. According to FT sources, the document is expected to be published in early July.

A macroeconomic forecast is also expected to be published later. According to it, Venezuela’s economy is valued at about $100 billion. For comparison, in 2012 that figure was around $370 billion. This means the debt-to-GDP ratio could exceed 200%.

At the same time, some representatives of the Venezuelan opposition fear that an accelerated restructuring without the IMF’s full involvement could weaken the country’s negotiating position with creditors.

Sources say technical consultations have already been held with the International Monetary Fund, and that the restructuring plan itself will rely heavily on IMF approaches.

The fund, however, said it is not involved in Venezuela’s debt-restructuring process, but maintains regular contacts with the country’s authorities and is ready to provide technical assistance upon request.

Some creditor estimates include $30 billion to $50 billion owed to oil companies and trading partners, more than $20 billion in court judgments in favor of companies whose property was previously nationalized, as well as debts to China, Russia and international development banks.