The move may be largely symbolic as Venezuela's cash-strapped economy is in no condition to pay, and the South American nation's overseas assets are protected from seizure by U.S. sanctions. Still, the acceleration foretells a legal battle that's brewing over the country's $60 billion of defaulted debt as well as the state oil giant's Houston-based subsidiary Citgo.
"It's basically a frustration," said Russ Dallen, managing partner at Caracas Capital in Miami. Bondholders are looking at "the possibility of getting a court judgment and getting those Venezuelan assets as everyone is getting in line, trying to get a piece of Citgo and lock in a judgment from a U.S. court."
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In September, a New York judge ruled that the country owes $390.7 million to Pharo Management and Casa Express Corp in overdue arrears, rejecting claims by the nation's representatives to delay the payment. The following month, London-based hedge fund Altana Wealth Ltd sued over defaulted debt. Bondholders have already accelerated on Venezuela's notes due in 2034.
