A Venezuelan state-owned bank is offering $5 billion worth of sovereign bonds maturing in 2036 at a discount of up to 80 percent to several Wall Street funds, according to a lawmaker and a finance industry source. The move is part of the embattled socialist government's strategy to raise fresh funds to support the crisis-stricken economy by selling bonds, gold and shares in oil projects.
A potential deal, coming on the back of a controversial sale of state oil company bonds to Goldman Sachs last month, would likely heighten opposition criticism that Wall Street is handing President Nicolas Maduro a lifeline amid a bruising economic crisis and major anti-government protests.
The sovereign debt securities, held by state-owned Banco de Venezuela since their issuance in late 2016, were offered in early May to Goldman Sachs, but the US bank rejected the deal, financial sources told Reuters. "Now they are being offered to funds in New York, instead of to large banks, with a discount of up to 80 percent," said opposition lawmaker Angel Alvarado, who tracks the negotiations between Nicolas Maduro's administration and Wall Street and was informed of the offer by sources in New York.
"They're still holding fire sales," he added, criticizing the potential deal with Maduro's cash-strapped administration. Opposition lawmakers, economists and lawyers have campaigned to cut off financing for Maduro, sending letters to the heads of 13 major banks and flagging the reputational risk of working with Caracas.