Venezuela Signs $3.2 Billion Debt Restructuring Deal With Russia

As Venezuela teeters right on the brink of complete financial collapse, Bloomberg reports that Russia has agreed to restructure roughly $3.2 billion in outstanding obligations.  While details of the restructuring agreement are scarce, both sides reported that the deal spreads payments out over 10 years with minimal cash service required over the next six years.

Russia signed an agreement to restructure $3.15 billion of debt owed by Venezuela, throwing a lifeline to a crisis-wracked ally that’s struggling to repay creditors.


The deal spreads the loan payments out over a decade, with “minimal” payments over the first six years, the Russian Finance Ministry said in a statement. The pact doesn’t cover obligations of state oil company Petroleos de Venezuela SA to its Russian counterpart Rosneft PJSC, however.


“The terms are flexible and very favorable for our country,” Wilmar Castro Soteldo, Venezuela’s economic vice president, told reporters in Moscow after the signing. “We will be able to return to the level of commercial relations with Russia that we had before,” he added, noting that a deal to buy Russian wheat will be signed next week.

This is the second time Russia has agreed to reschedule Venezuela’s debt payments after agreeing to an extension last year. Still, Caracas failed to make payments amid an economic crisis triggered by low prices for oil. Rosneft has also provided several billion dollars in advance payments for Venezuelan crude supplies.

The rescheduling pact is a “demonstration of the desire to maintain ties with the current Venezuelan leadership,” Viktor Kheifets, an expert in Venezuela at St. Petersburg State University, said by phone. “Russia isn’t happy with everything that the government there is doing but Venezuela is an ally where Russia has economic interests and Moscow is firmly against a forcible change of regime there.”


In a website statement announcing the deal, Russia’s Finance Ministry said, “The debt relief provided to the republic from the restructuring of its liabilities will allow funds to be allocated for the country’s economic development, to improve the debtor’s solvency and increase the chances of all creditors to recoup loans granted earlier to Venezuela.”

Putin Maduro

Of course, the deal with Russia comes as attempts to hold talks with Venezuela's other creditors faltered this week. President Nicolas Maduro had summoned holders of some $60 billion of bonds issued by the government and PDVSA to begin a renegotiation as the nation’s cash crunch worsens, but as we noted previously (see: S&P Downgrades Venezuela To "Selective Default" After Bondholder Meeting Devolves Into Total Chaos), the meeting turned out to be nothing more than a photo op. 

Meanwhile, as the Financial Times noted yesterday, failure of ISDA committees to determine whether or not a default event actually occurred when Venezuela blew through its grace period, has only added to the confusion of the restructuring process.

A finance industry committee convened to discuss whether Venezuela’s state oil company has defaulted on its debts has elected to delay the decision once again, underscoring the uncertainly swirling around the country’s bond payments.


Venezuela belatedly came through with a $1.1bn PDVSA bond payment last week, but only well after a three-day grace period following the bond’s maturity on Nov 3. That led to a request that the International Swaps and Derivatives Association’s “determinations committee” consider whether PDVSA was in default.


The Isda committees have the power to declare a “failure to pay”, which would trigger insurance-like contracts on PDVSA’s bonds, known as credit-default swaps, even if the actual bondholders haven’t declared it a default. But in a statement on its website on Monday, Isda said that the committee had decided to reconvene on Tuesday at 11am to discuss the PDVA question further.

All of which has left bondholders in limbo...


eclectic syncretist bobcatz Wed, 11/15/2017 - 12:01 Permalink

Wow!!! Fucking Wow!! For a few minutes of running the printing presses Russia gets a positive working relationship with the country controlling the largest proven energy reserves in the world, and also gets an internationally valid claim against said oil if things go south on their no-lose deal. The real shocker is how it took so long for this to happen. That's where the real story is here. do we start hearing about the petro-ruble, to go along with the petro-yuan, gold-backed yuan ect......How's that dollar doing now you stupid motherfuckers in Congress?

In reply to by bobcatz

HopefulCynical JibjeResearch Wed, 11/15/2017 - 12:41 Permalink

My from-the-hip take? If you hate Russia, you love this deal. Do we really think Venezuela is going to mend their commie ways? So they've just gotten 3 billion plus from Russia, which they're not going to use in any sort of responsible fashion.Had Putin waited until street rioters had dragged Maduro out of his palace and lynched his ass, that would be worrisome. But when oil prices, which are Venezuela's one source of income, crashed, they doubled down on their commie bullshit. Maduro is Chavez 2.0; the gibs will flow, the gibs must flow. Gibs is life, commie bitchez.I'll wait to see, but this looks like a bad deal for Russia. Putin is shrewd, but he's also besieged and ambitious, and I think he may have overplayed his hand.

In reply to by JibjeResearch

HopefulCynical BennyBoy Wed, 11/15/2017 - 12:54 Permalink

Yes, I read Confessions of an Economic Hitman also, and found it very credible. But the fact is that regardless of CIA predations, South American countries are rotten with some of the most corrupt communism on the planet, and that's saying something. They're NOT going to give that up, and given Russia's past, they're in no position to demand otherwise. Venezuela could turn into a giant bottomless financial pit for Russia, especially given the fact that Venezuela never even modernized their oil infrastructure when oil was north of $100/bbl, much less diversified into refineries, let alone anything non-petroleum related. What do you suppose it will take to modernize that basic existing infrastructure, so that it's in any way possible for a partnership between Russia and Venezuela to be profitable? Because that's what everybody seems to be seeing here, Russia buying its way into partnership in the Western hemisphere.Putin might come out smiling, but to me, that's a coin flip outcome at best. I'm pretty sure the Venezuelan commies are gonna fuck him, when it's all said and done.

In reply to by BennyBoy

ebear HopefulCynical Wed, 11/15/2017 - 17:31 Permalink

"Do we really think Venezuela is going to mend their commie ways?"Saw the collapse of the USSR coming, did you?  How about China opening to the west and shifting to private property and investment?  Catch you by surprise as well?With foreign investment comes foreign advice.  We like to see how our money's being spent, no?Besides the cash, Russia and China bring good advice to the table, the first being to ease off the rhetoric and start making practical changes.  You'll see.  If they can do it at home, I'm sure they can convince other "commies" especially when they're writing the checks.

In reply to by HopefulCynical

Son of Captain Nemo Wed, 11/15/2017 - 11:27 Permalink

I just saw something happen in Lugansk ( and "Raqqa"!!!

"Turkey on Wednesday condemned as “an extremely grave revelation” the potential escape of hundreds of extremists from the Syrian city of Raqqa. The US-backed Syrian Democratic Forces (SDF) said over 3,000 civilians had left Raqqa on October 14 as part of a deal negotiated between officials from the provisional Raqqa Civil Council and Islamic State (IS, formerly ISIS/ISIL) fighters, AFP reported. The US-led coalition later acknowledged that of these up to 300 were seen as ‘potential’ IS fighters. Ankara has long criticized Washington for working with and arming the Kurdish YPG as the main US ally in the fight against IS."...

What might you ask is the difference in these asymmetric act(s) of warfare?...

Only one of those sides has the "sound money"! Can you guess which of the party(s) "DOES NOT"?!!!

Tick... Tock... Tick... Tock..

Mike Masr Son of Captain Nemo Wed, 11/15/2017 - 11:36 Permalink

I would take what you read on with skepticism and a grain of salt.Poroshenko's very existance is under threat from his own neo-nazi banderists and he is desperately trying to divert attention away from his problems by escalating the attacks on innocent civilians in the Donbass. Read below how his Ukro-nazi forces attacked a school bus with 40 kids.… to also keep an eye on these websites to get a more balanaced perspective.Novorossiya Today Russ 

In reply to by Son of Captain Nemo

Son of Captain Nemo Mike Masr Wed, 11/15/2017 - 11:42 Permalink


I agree with everything you're saying but just look at the before and after of Ukraine circa 2014 and the level of desperation that still prevails in that Zionist contrived 'basket case".

If you had told me that Porko-Jew would still be the titular head in 2017 after what the U.S. has already done to it I probably would have laughed in your face outside of 1 year of that coup...

Well... That junta is still alive and well -isn't it!

In reply to by Mike Masr

Son of Captain Nemo Justin Case Wed, 11/15/2017 - 12:58 Permalink

Well J C

Tell that to the roughly 20 to 60 thousand that died? As well as the 2 to 4 million that fled Eastern Ukraine after the infamous "Fuck the EU" phone tap from that smelliest of Zionist horned and bifurcated tailed cunts???...

Last I checked overthrowing sovereign government(s), destroying those sovereign government's property and torturing and murdering it's peoples are still considered war crimes!!!

In reply to by Justin Case

Justin Case Son of Captain Nemo Wed, 11/15/2017 - 13:35 Permalink

merica is good at breaking things, not fixing or making better for those that live there. Libya example 2. Merican sponsored. Merica funded the coup de tat in Ukraine and now abandoned them. Russia gives humanitarian aid, what did merica do after their prize was snatched? They left Ukrainians to rot. Foiled plans. Did merica send anything other than weapons?

In reply to by Son of Captain Nemo

HowdyDoody Mike Masr Wed, 11/15/2017 - 14:20 Permalink

The Ukro-Nazis have been shelling civilian infrastructure in east Ukraine throughout the Minsk 2 'ceasefire'. The Novorossians have been very patient, following the rules of disengagement. A short while back, they did get to the stage of saying enough is enough in one area, so they quite precisely took out 2 Ukro-Nazi artillery groups and 3 armored bunkers used to control their fire. This was done without casualties to themselves.The Ukraine military is slowly turning into a pure Ukro-Nazi outfit, with only ~4% of the latest draft (the 7th since the start of the troubles) actually joining up. The Novorossians will have no qualms about trashing them when the time comes. 

In reply to by Mike Masr

HRClinton Son of Captain Nemo Wed, 11/15/2017 - 12:20 Permalink

For their sake, I hope that Turkey has finally figured out that all they ever were or will be, is a "Junior JV player" in the Anglo-Zionist sphere. Their ONLY purpose was to stymie and contain the Soviets, and now the Russians. Cause that's what (((Bolshevik descendants))) and Rothschilds want. Turkey is just an Asset, a bunch of turkeys to the A-Z Team.

In reply to by Son of Captain Nemo