Venezuelan president Hugo Chávez may have worried democrats with his moves to curb congressional powers but for debt underwriters and investors it promises to be good news. The reforms have made it easier for Venezuela to issue and the country is set to join other emerging-market sovereigns returning to the international capital markets this year.
Shortly after his election victory last February, Chávez brought out the enabling law and in late May the cabinet approved a new debt law. In the past congress had to sign off on every deal that the republic launched. This meant that any amendment to the mandated terms forced on the issuer by changes in market conditions needed to go back to congress for approval. With the passage of the new laws, borrowings no longer require specific approval.
"The law means we have approval to set the amount of debt we wish to issue in the year," says finance minister Maritza Izaguirre. "We still require clearance from the central bank and congress but we now have the tools to speed up the process. It might now be a matter of two weeks instead of four or five to obtain approval for our debt programme."