CARACAS--Venezuela's socialist government gifted chocolates to creditors on Monday, but offered no firm proposals at a brief meeting in Caracas that left investors without a clear understanding of the government's strategy to renegotiate $60 billion in debt.
President Nicolas Maduro confused investors this month with a vow to continue paying Venezuela's crippling debt, while also seeking to restructure and refinance it. Both restructuring and refinancing appear out of the question, however, due to U.S. sanctions against the crisis-stricken nation. A default would compound Venezuela's dire economic crisis.
Monday's short and confused meeting, attended by senior Venezuelan officials blacklisted by the United States, gave no clarity on how Maduro would carry out his plan, bondholders and their representatives who participated said afterwards. That means Venezuela remains with the dilemma of whether to continuing paying debt at the expense of an increasingly hungry and sick population, or defaulting on creditors and burning its bridges to the global financial system.
"There was no offer, no terms, no strategy, nothing," said one bondholder, leaving the meeting that lasted a little over half an hour at the 'White Palace', departing with a colorful gift-bag containing Venezuelan chocolates and coffee.
But bond prices maintained last week's rally, with one investor saying there was relief the meeting did not include a default announcement. Nearly $300 million in late interest payments on three bonds - PDVSA 2027, Venezuela 2019 and Venezuela 2024 - was also due on Monday after 30-day grace periods ended. But bondholders appeared unconcerned at the delay, which was due in part to increased bank vigilance of Venezuela transactions.
"My expectation is that the coupon payments will come through as well," said Jan Dehn, Head of Research at Ashmore Investment Management. "We know that these delays exist and why they exist."
About 100 investors, including some bondholders from New York and lawyers representing creditors, entered the 'White Palace' via a red carpet and were greeted by a poster of Maduro's predecessor Hugo Chavez at the entrance of the meeting room inside. Chief debt negotiators Vice President Tareck El Aissami and Economy Minister Simon Zerpa - on U.S. sanctions lists for drug and corruption charges respectively - attended the meeting for half an hour. They met with some bondholders, while others stayed out of the room on concerns about penalties for dealing with officials sanctioned by Washington.
