Venezuelan Creditors Have Now Started The Process Of Demanding Payment On Defaulted Bonds

A cashier counts bolivars at money exchange in Caracas, Febreuary 24, 2015. REUTERS/Carlos Garcia Rawlins

Reuters: Exclusive: Venezuela creditors demand payment on defaulted $1.5 billion bond - lawyer

CARACAS (Reuters) - A group of creditors has demanded payment on a $1.5 billion Venezuelan bond that is in default, their lawyer said on Monday, kicking off a long-awaited showdown between creditors and the crisis-wracked OPEC nation.

President Nicolas Maduro’s government and state-owned companies owe nearly $8 billion in unpaid interest and principal following this year’s default on bonds amid a hyperinflationary collapse of the country’s once-wealthy socialist economy.

Five investment funds have demanded that Venezuela pay the principal and outstanding interest on its 2034 bond VE018389347=, said Mark Stancil of Washington-based law firm Robbins Russell, who represents the group. It is the first step in a potential legal campaign by creditors to recover their investments.

The decision could trigger similar efforts by investors holding $60 billion in outstanding bonds issued by Venezuela and state oil company PDVSA [PDVSA.UL]. That could pave the way for a creditor dispute similar to the one that roiled Argentina for a decade.

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WNU Editor: The only asset that the Venezuelan government has is it's oil .... but that has already been mortgaged off to the Chinese and Russians. As for these creditors, they are the first to demand payment, and as predicted they have started the long-awaited showdown between Venezuela's creditors and this crisis-wracked OPEC nation. Bottom line .... this is not going to end well for Venezuela. They will become a country that has no currency of value to use in transactions when buying or selling essentials.