But now the exemption, which gives bondholders the right to buy Citgo shares as a payment, would end up hurting Guaidó, not Maduro. Citgo is a profitable company and can pay the interest due on its own debt, but would face difficulties in paying PDVSA's debts.
Members of a Venezuelan bondholder committee, led by Greylock Capital Management and T. Rowe Price, proposed that management and Mr. Guaidó allow lenders to lend more money to avoid default. Investors did not define the form of this loan, but would presumably increase PDVSA's debt.
"No one wants to see them unnecessarily delinquent," said Ajata Mediratta, Greylock's managing partner, president and portfolio manager. “Several lenders have explicitly offered to help the Guaidó administration make this payment. But the quid pro quo is that lenders would like the Guaido government to work with lenders to encourage the US Treasury to change trade sanctions. "
A Treasury Department spokesman declined to comment on Thursday.
The opposition-controlled National Assembly declared this week that the 2020 bonds were not valid because the assembly had not approved them. Bondholders say this argument may not be upheld in an American court.
Exacerbating Citgo's risk, the US Third Circuit Court of Appeals in Philadelphia ruled last month that Crystallex International, a Canadian gold mining company, could claim Citgo shares. In 2011, the Venezuelan government, then led by Hugo Chávez, nationalized Crystallex's share in a mining project. Maduro's government paid the company $ 500 million in debt of $ 1.4 billion last year, but failed to pay other installments agreed in the arbitration.
Other potential plaintiffs include ConocoPhillips, which has been awarded more than $ 10 billion by international courts for its Venezuelan projects expropriated by Chavez, who died in 2013. This Houston oil company has so far not sought to acquire Citgo, trying to get paid. directly through arbitration with PDVSA and the Venezuelan government.
Financial analysts expect PDVSA bondholders to be first in line to receive Citgo shares, as the $ 3.4 billion in 2020 in bonds is backed by 50.1% of Citgo shares. Ashmore Group, a London-based investment firm, has the largest equity stakes, and other lenders may file lawsuits to auction Citgo at the highest bid to recover the money owed.