Foreign Debt

Caracas, January 28, 2026 (venezuelanalysis.com) – International creditors have shown growing optimism to collect on defaulted Venezuelan debt in the wake of the January 3 US military strikes and kidnapping of President Nicolás Maduro.

According to Bloomberg, the volume of Venezuelan bonds traded increased tenfold since the start of the year. Securities have rallied to around 40 cents on the dollar, having hit lows of 1.5 cents on the dollar in the past.

A combination of defaulted bonds, unpaid loans and arbitration awards is estimated to total up to US $170 billion after years of accruing interest. The Maduro government began defaulting on debt service in 2017 as US sanctions crippled the Caribbean nation’s economy and ultimately blocked financial transactions altogether.

The Venezuelan Creditor Committee (VCC) expressed “readiness” to discuss a debt restructuring deal when authorized. The group brings together creditors including GMO, Greylock Capital, Mangart Capital, and Morgan Stanley, which hold over $10 billion in sovereign and state oil company PDVSA bonds.

Elias Ferrer Breda, financial analyst and director of Orinoco Research, told Venezuelanalysis that the “enthusiasm” means creditors feel a debt restructuring deal is “closer,” but warned that any agreement will hinge on US recognition of the Venezuelan government.

“The recognition, along with the lifting of primary sanctions, is the final obstacle,” he said. “There have been steps to reopen the US embassy in Caracas and a Venezuelan delegation headed by Félix Plasencia also visited DC.”

The first Trump administration recognized the self-proclaimed “interim government” led by Juan Guaidó as Venezuela’s legitimate authority in 2019, prompting Caracas to break diplomatic relations. After the parallel Guaidó administration dissolved in 2022, Washington transferred the recognition to the opposition-majority National Assembly whose term expired in 2021.

The small group of US-backed politicians retains control over Venezuelan-owned assets in the US. For its part, the Venezuelan government headed by Acting President Delcy Rodríguez has advocated a renewed diplomatic engagement with Washington. The two administrations have taken steps to reopen the respective embassies.

Ferrer, who also directs the Guacamaya media outlet, suggested that the State Department has no immediate plans to change its formal recognition of the defunct parliament. 

“However, there is a de facto recognition of the Rodríguez acting government being built,” he went on to add. “This will become de jure sooner or later; it could be a few months or even a couple of years.”

Venezuela’s inability to sustain debt service, including settlements with creditors, as a result of sanctions, saw many corporations pursue legal avenues to collect. Crystallex, ConocoPhillips and several other companies are set to benefit from the proceeds of the forced judicial auction of Venezuela’s US-based refiner CITGO.

Washington’s formal recognition of the Rodríguez acting administration could also pave the way for Venezuela to access about $4.9 billion in “special drawing rights” issued by the International Monetary Fund (IMF). The IMF created the liquidity instruments in 2021 to help governments deal with the Covid-19 pandemic but blocked Venezuela from accessing its share as it followed Trump’s lead in not recognizing the Nicolás Maduro government.

According to reports, US Treasury Secretary Scott Bessent recently held meetings with the heads of the IMF and the World Bank to discuss a possible re-engagement with the South American country.

For their part, Venezuelan authorities have expressed a willingness to engage with creditors in the past, but US sanctions preempted any meaningful engagement.

Caracas’ debt also includes long-term oil-for-loan agreements with China. However, with Washington’s naval blockade recently blocking China-bound crude shipments, Beijing has reportedly sought assurances of the repayment of debts estimated at $10-20 billion.