CARACAS – The US-backed interim government of Venezuela led by Juan Guaidó, also president of the Congress or National Assembly, called the Friday ruling of a NY court denying the request for annulment of the PDVSA 2020 bonds “partial and unfair” and held the government of leftist incumbent Nicolás Maduro responsible for the consequences that the ruling would entail.
“From the interim government we support the legal team appointed by the PDVSA Ad Hoc Management Board in doing the necessary assessments to consider all the legal options, including an appeal,” said the Board in a communiqué released on Friday.
In the eyes of Guaidó’s legal team representing the interests of PDVSA abroad, the issuance of the PDVSA 2020 bonds is fraudulent because Maduro offered CITGO-owned PDV Holding (PVH) shares as collateral, an agreement that can only be approved by the National Assembly.
Members of the team explained that they filed a nullity action against these bonds before the US District Court for being this the only option to protect CITGO’s assets from being sold since negotiations with bondholders were unsuccessful before the main bond maturity and the due date of the corresponding interest took place, which would have resulted in a $1 billion loss for the state coffers in debt alone.
However, they argued that the CITGO assets are still under the protection of the US government despite the court ruling, as provided by an Executive Order from the Office of Foreign Assets Control (OFAC) of the US Department of the Treasury, valid until January 2021, thus “providing an adequate time frame to keep moving forward with the procedural strategy for CITGO’s defense.”
Lastly, they pointed out that the interim government has no intention to repudiate the debt or the claims against the State because the true intention is that Venezuela can fulfill its obligations as long as these have been legitimately contracted with the endorsement of the National Assembly.