Venezuelan opposition planned default • The Bell • RIMA

Venezuelan opposition planned default

As soon as President Putin recalled the billions of dollars invested by Russia in Venezuela under President Maduro, the Venezuelan opposition told how exactly it was not going to give them back in the near future.

What's happened. Details of the debt restructuring proposal from the alternative government of Juan Guaido, whom the United States considers the legitimate president of Venezuela, was published by the Financial Times.

All creditors of the country will be in an equal position. This means that a court decision to collect a debt will not give creditors an advantage. “The message is: don’t sue Venezuela, you will only lose money,” legal adviser Guaido told the FT.
There will be four exceptions: public debt to Russia and China, debt agreements that are checked for corruption by the "Chavez and Maduro regimes", international payments by arbitration, as well as commercial debt claims secured by state property, including the property of state enterprises.
The last category includes bonds of the oil state company PDVSA, secured by shares of the American CITGO. The company continues to service this debt.

What's next. According to RBC experts, the inclusion of the debts of Russia and China in a separate category does not mean that Venezuela is not going to pay them.

So far, it is possible that these debts will remain a priority. However, the experience of other sovereign defaults shows that countries pay off commercial creditors faster and more fully, while state creditors suffer more losses during restructurings.

Money. According to RBC estimates, about a third ($53.5) of the $155 billion of Venezuela's total debt falls under special conditions.

The country owes Russia $3.5 billion, Putin said, and the Maduro government is delayed, but is servicing this debt.
The total debt of Venezuela and PDVSA on bonds is $65 billion. At the end of 2018, PDVSA's debt to Rosneft was $2.3 billion. In 2014–2017, Rosneft provided the Venezuelan company with $6.5 billion (including interest).
PDVSA is repaying the loan with oil supplies, but since the beginning of the year it has become increasingly difficult due to US sanctions that threaten Rosneft itself.

To learn more. About how much Rosneft has invested in Venezuela, we wrote here . About Igor Sechin's approach to relations with this country - here .