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Venezuela bondholders meeting ended without pact on strategy: sources
December 1, 2017 / 7:40 PM / in 15 days

Venezuela bondholders meeting ended without pact on strategy: sources

(Reuters) - A meeting of Venezuelan bondholders on Thursday to discuss how to handle the government’s request to restructure $60 billion in outstanding bonds has yielded no clear strategy, sources with direct knowledge of the meeting told Reuters on Friday.

The meeting in London, organized by UK-based hedge fund MacroSynergy Partners, was attended by about 60 creditors in person and 40 who listened in over the phone, the sources said.

The group represents an estimated 75 to 80 percent of the institutions that hold debt from cash-strapped Venezuela and its state-run oil company, PDVSA.

Attendees said the consensus was that it was too early to form an official committee since the country has continued paying its debt, even while missing some deadlines.

“There are a bunch of guys who prefer to be behind the scenes, but there are people who believe that we should start to have a dialogue with the Venezuelans,” said one bondholder who was at the meeting and spoke on condition of anonymity.

Among those in attendance were lawyers from Cleary GottliebSteen & Hamilton LLP, including Lee Buchheit, a partner who specializes in sovereign debt restructurings, sources said.

Rothschild (ROTH.PA), the Paris-based global advisory firm, also participated, two sources familiar with the meeting said, a sign that top financial firms are interested in advising on what could be one of the world’s most complex sovereign debt solutions ever negotiated.

    Another source, who listened to the meeting via telephone and also requested anonymity, said more meetings are expected before any kind of consensus is reached.

    “Bondholders have no clear strategy,” the source said. “Usually it takes three to five meetings for something to come together.”

    The creditors are seeking to overcome the dual problems of U.S. sanctions imposed on Venezuela and a lack of any concrete economic program from the government. Venezuela owes a substantial amount of debt to the Chinese and Russian governments, inhibiting their ability to free up cash for creditors.

    Venezuelan bonds were trading mostly in negative territory, with its 2019 $2.5 billion sovereign bond down more than 3 percent in price to 24.25. The PDVSA 2022 bond fell 2.7 percent to 27.30, with a yield of 79.2 percent.

    Reporting by Dion Rabouin; Additional reporting by Sujata Rao in London and Paul Kilby in New York; editing by Grant McCool

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