ASSESSMENTS
As Venezuela's Opposition Stumbles, the Country's Creditors Circle
Jun 28, 2019 | 05:45 GMT
Highlights
- With Venezuela in default on about $175 billion in foreign debt, the political opposition intends to begin restructuring debt payments to prevent creditors from seizing assets, but negotiations with creditors could fall apart as regime change efforts falter.
- The diminishing likelihood that opposition leader Juan Guaido will soon become Venezuela's president will drive the country's opposition to fragment. Other opposition leaders will maneuver to replace him, making it more likely that he'll lose the National Assembly presidency in a vote in January 2020.
- If Guaido is replaced, the immediate prospect of successful negotiations to restructure debt will decline as creditors will race to seize Venezuelan energy assets, such as crude oil cargoes, to force Caracas to partially repay some loans and arbitration awards.
- And even if the Venezuelan opposition succeeds in ousting President Nicolas Maduro within several years, ongoing legal battles between creditors and the new government will likely deter all but the most risk-tolerant of investors.
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