Goldman Sachs Purchases Venezuelan Debt at a High Discount

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Goldman Sachs has recently offered to buy $4 billion worth Venezuelan debt owed by the Dominican Republic for 41% of its value. This comes as both the price of Brent Crude has plummeted, and Venezuela 2027 bond price has plummeted, which is expected because oil sales generate more than 95% of the countries cash flows (see chart). Some sources who spoke under the condition of anonymity to the Venezuelan circular El Nuevo Heraldo commented on the deal saying that Venezuela is “liquidating the few assets they have, trying to find the cash flow, cash, they do not have.”

And the fire sale of these assets come at a high discount, not only the 59% gains that Goldman Sachs is going to realize, but it also includes a strong signaling to the international economic markets the problems Venezuela is currently facing. Former Venezuelan ambassador to the UN Diego Arria remarks that the deal is both “a great monetary loss for the nation” and “a great loss of credibility for the Venezuelan situation.”

Venezuelan Bonds Continue to Crash