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  HOME | Venezuela (Click here for more Venezuela news)

Venezuela Names Commission to Re-Negotiate Debt
Members of the "Presidential Commission to Renegotiate the Terms of the Foreign Debt of the Republic and PDVSA" are named -- including 2 members on the USA sanctions list that prevents US citizens and companies from negotiating with them -- and a meeting with bondholders is called for November 13.

CARACAS -- Venezuela's beleaguered regime has released the names of its members who will sit on its "Presidential Commission to Renegotiate the Terms of the Foreign Debt of the Republic and PDVSA."

"In the framework of the principles of responsibility, dialogue, transparency and commitment, which have always guided the ethics and political action of the Revolution, the President of the Bolivarian Republic of Venezuela, Nicolás Maduro, announces to the international community the creation of the PRESIDENTIAL COMMISSION TO RENEGOTIATE THE TERMS OF THE FOREIGN DEBT OF THE REPUBLIC AND OF PDVSA, which will be chaired by the Executive Vice President of the Republic, Tareck El Aissami, and integrated by the Vice President of Economy, Wilmar Castro Soteldo; Vice President of Planning, Ricardo Menéndez; People’s Minister of Economy and Finances, Simón Zerpa; People’s Minister of Petroleum, Eulogio Del Pino; General Procurator of the Republic, Reinaldo Muñoz; and President of Petróleos de Venezuela, Nelson Martinez," the Venezuela regime said in a statement.

"This commission will lay the foundations to ensure a sincere and transparent dialogue between the Bolivarian government and the national and international bond holders, to find structural formulas to jointly overcome the illegal imperialist sanctions that infringe upon the internal and international financial development of the country and the human rights of the Venezuelan people."

Two of those members -- Vice President El Aissami who will chair the group and Finance Minister Zerpa, who is also CFO of PDVSA and head of state bank BANDES -- are sanctioned by the U.S. as specially designated nationals under the U.S. Treasury's OFAC sanctions list and Americans are forbidden from dealing with them.

El Aissami was named a "Drug Kingpin" by the U.S. in February. The U.S. Department of State told the Latin American Herald Tribune in August that they had already found and seized over $500 million in accounts and properties in the USA linked to the 42 year old El Aissami, who has worked in the Chavista government his whole life.

34 year old Zerpa, who also heads the black box responsible for spending the almost $65 billion of China's contributions to Venezuela known as Fonden, the National Development Fund, was named to the sanctions list in July as Venezuela pressed ahead with its illegitimate and fraudulent all-powerful Constituent Assembly. His father serves as Venezuela's Ambassador to China.


On the evening of November 2, the day state oil company PDVSA was due to have paid $1.2 billion for the maturity of a bond, Venezuela leader Nicolas Maduro went on national TV to drop the bombshell that they had not paid it yet but that he was ordering the debt to be paid but that he was also ordering a "restructuring" and "renogation" of Venezuela and PDVSA's debt.

"First Friday morning, November 3, the payment of the 2017 PDVSA Bond will begin, but after this payment, as of today, I decree a refinancing and a restructuring of the external debt and of all the payments of Venezuela," ordered Maduro.

The announcement sent the already debilitated $66 billion U.S. dollar Venezuela debt markets to confused new lows, with bond prices crashing 20% to 50% from already low levels.

"Maduro, on the one hand, announced that PDVSA (the big state-owned oil company that produces 95% of Venezuela's foreign currency earnings) was making its latest payment to creditors (due today) and, on the other hand, announced that a restructuring was being planned immediately," writes Duke University Law Professor Mitu Gulati. "What? Why? How? If the plan is to restructure because there is no money, then why were the payments today (and a few days ago) made? And how in the world is there going to be a restructuring when there are US sanctions prohibiting just that? Through some Russian proxy? Or Chinese? Via a loophole in the sanctions regime?"

The market was so confused that in the hours following Maduro's declaration in Asia and Europe hours, the market was trading the bonds as if they were defaulted already, with no interest coupons attached. In the market chaos, some brokers were telling panicked sellers that they would buy the bonds from them flat (without interest attached) and at the same time telling bottom-fishing buyers that they would sell them the bonds with interest, requiring buyers to pay the interest. By 9:40 am in New York, the Emerging Market Traders Association (EMTA) had ruled that no official default had occurred and bonds should trade normally, with interest.

"We want to take this opportunity to denounce before the international community the ongoing aggression, permanent sabotage, blockade and financial persecution to which our people have been subjected by the government of Donald Trump and his insolent imperial policy of domination and economic asphyxiation whose aim is to break the will of an entire people determined to be free and that is advancing in the construction of a stable, diversified, harmonious and integral economic system," the Regime statement added.

"The so called sanctions imposed by the Trump government are in fact hurting the bond holders in international financial institutions. Venezuela has responded by continuing honoring its obligations, despite the illegal measures and sanctions of the US regime, which has built a perverse scheme of aggression that will continue failing in its attempt to isolate the Bolivarian government," the statement claimed.

Immediately in the wake of the announcement Venezuela government twitter accounts began using the hashtag "#EnVenezuelaElPuebloEsPrimero" which means "In Venezuela, the people come first."

"Venezuela takes this decision in compliance with the Resolution adopted by the General Assembly of the United Nations on the basic principles of sovereign debt restructuring, thus legitimizing the right of countries to restructure their liabilities, so that they can grow again without interrupting the payment of their obligations and guaranteeing that good faith investors will not fall into the clutches of the vultures of the international financial system. This renegotiation will cover the debt commitments acquired through bonds issued both by PDVSA and the Republic," the Venezuela government said.


The first act of the Debt Renegotiation Commission was to invite all Venezuela and PDVSA bondholders to a meeting in Caracas scheduled for Monday, November 13 "to begin the joint construction of effective mechanisms that guarantee the fulfillment of the commitments, within the framework of a sovereign process of renegotiation of our foreign debt."

Venezuela's Debt Renegotiation Commission says that investors can reach them with participation requests or to make inquiries about the meeting by emailing renegociacionsoberana@mppef.gob.ve .


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