The country's elected opposition-led National Assembly in 2019 issued an order naming supervisory boards to look over Venezuela's foreign assets after the U.S. imposed sanctions intended to oust President Nicolas Maduro. The congress is the only one recognized abroad and has received U.S. authority to negotiate any external debt payments.
The proposal to bondholders, which would allow for payment negotiations and debt restructuring efforts, would be similar to a plan presented in March by the Venezuelan government and state oil company PDVSA to suspend statute of limitations on the debt until 2028 or until U.S. sanctions on the nation are lifted.
Since the Maduro administration is not recognized by Washington, the government's proposal has not shown much progress. An equivalent plan by the opposition-led National Assembly also would have to be green lit by the U.S. "There must be a joint declaration over the bonds' validity by Venezuela's Committee for Administration and Protection of Assets and PDVSA's ad-hoc board, which could happen this week," said Horacio Medina, who leads the PDVSA ad-hoc board.
If the proposal is passed, the National Assembly would allow negotiations to extend the bonds' validity for five more years, according to a source involved in the talks.to explore payment options and avoid an auction of shares in one of the parent companies of Venezuela-owned refiner Citgo Petroleum.