Venezuelan debt restructure 'inevitable'

Author: Zoe Thomas | Published: 1 Oct 2014

Despite continued guarantees that Venezuela will make payments on its sovereign bonds in October, experts say a default or restructuring process is inevitable.

The recent suggestion that the country was on the verge of defaulting on its sovereign payments, having already failed to make payments to domestic importers succeeded in spooking investors at the beginning of September.

Assurances from the government - both that the country will pay its foreign creditors and that it will not sell the petroleum company Citgo, an important sizable asset for bondholders - have helped to calm this reaction.

However, Venezuela’s situation remains precarious. Creative alternatives for raising capital or restructuring its bonds that the country has turned to in the past, are dwindling as the government faces rising debt and a public relations crisis.