PT  - JOURNAL ARTICLE
AU  - Elena Duggar
AU  - Jaime Reusche
TI  - Why Venezuela’s Debt Restructuring Is More Challenging than Past Restructurings
AID  - 10.3905/joi.2018.27.3.037
DP  - 2018 Aug 31
TA  - The Journal of Investing
PG  - 37--44
VI  - 27
IP  - 3
4099  - https://pm-research.com/content/27/3/37.short
4100  - https://pm-research.com/content/27/3/37.full
AB  - Venezuela’s debt restructuring could be the fourth-largest sovereign restructuring in history. The country’s default was triggered by missed interest payments on both government and Petroleos de Venezuela S.A. (PDVSA) bonds in November 2017. Shortly thereafter, the government announced its intention to restructure its debt. This article compares Venezuela’s crisis with prior sovereign bond defaults and argues that several key features will make restructuring Venezuela’s debt more complex and likely more protracted than in past sovereign debt crises, with likely larger-than-average losses experienced by bondholders. These include Venezuela’s heavy annual debt maturities through the next decade, the interdependence of government and PDVSA finances, the extent of the economic crisis in the country, elevated sociopolitical tensions, lack of transparency on economic data, and U.S. sanctions imposed on Venezuela.TOPICS: Fixed income and structured finance, emerging, financial crises and financial market history