Venezuela creditor group expands ahead of debt restructuring

Committee representatives are in talks with additional investors interested in joining, including hedge funds in the US and the UK, as they seek to amass holdings of as much as half of Venezuela’s roughly $60 billion in outstanding international bonds, according to people familiar with the matter. While the committee declined to disclose its current holdings, it was estimated to control more than $10 billion of defaulted sovereign and state oil company debt as of 2024. The restructuring effort has been delayed as Venezuela grapples with the aftermath of two catastrophic earthquakes that killed more than 5,000 people and left tens of thousands injured.

Even so, Economic Vice President Calixto Ortega said earlier this month the government expects to release a roadmap “in the next few weeks.” An initial assessment of the debt had originally been expected before the end of June. Venezuelan bonds have rallied more than 60% this year following Maduro’s capture, supported by US efforts to restore ties with the South American oil producer and boost its energy output. Sovereign notes due in 2027, among the country’s most liquid, trade near 50 cents on the dollar, roughly in line with many investors’ estimates of recovery value.

The creditor group was formed shortly after Venezuela defaulted on its debt in 2017. Its members include Morgan Stanley Investment Management, Grantham, Mayo, Van Otterloo & Co. LLC, among others.

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Founding member Greylock Capital Management has stepped back from the steering committee while remaining a member of the broader creditor group, according to people familiar with the matter. Reuters previously reported on Greylock stepping back. Through their legal counsel Orrick, Herrington & Sutcliffe LLP, the group said the steering committee, which guides its strategy and includes about a dozen funds, has remained largely unchanged since January even as the broader creditor group has continued to add members. Greylock and Houlihan Lokey, the financial adviser for creditors, declined to comment.

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