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A committee of international investors holding defaulted Venezuelan sovereign and PDVSA’s bonds has selected investment bank Houlihan Lokey as its financial adviser, marking an important step toward a potential debt restructuring. Although a formal contract has not yet been signed, the appointment prepares creditors to negotiate with Venezuelan authorities over roughly $60bn in debt, or about $100bn including overdue interest, that have been in default since 2017. The Venezuela Creditor Committee — whose members include major asset managers such as Fidelity, Morgan Stanley Investment Management and Greylock Capital — has indicated it is ready to begin talks once it receives legal authorization. Current US sanctions prohibit negotiations with Venezuelan officials, so investors will require a special license, and legal challenges may arise because Washington does not fully recognize the current leadership. The capture of former leader Nicolás Maduro and signs of improved relations with the US have boosted Venezuelan bond prices. Creditors hope restructuring could reopen Venezuela to foreign capital, particularly in the oil sector.
Venezuela’s bonds traded stable. For instance, its 9.375% 2034s was at 44.4 cents on the dollar.
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