The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Debt: Can we skip ahead with Venezuela?

The country is now in default on almost all of its foreign currency bonds; investors need to think ahead about the debt renegotiation to come.


Mexico blew up the LDC crisis in 1982 but the Brady Plan wasn’t introduced until 1989. The 1980s were a lost decade for most of Latin America as debt negotiations advanced slowly, stalled, and broke down.

The same dynamics have affected many other defaulting nations. Even with EU support the Greek debt crisis has been a tortuously slow affair, with debt plans agreed only to be shown to be too moderate to allow the country to grow again.

The common thread in all these painfully slow accords, of course, is the slow adjustment of creditors to the size of debt write-off required. Creditors won’t take big haircuts voluntarily. At least not in one go – they have to be led there in tranches when they see the unviability of a country trying to pay off restructured debts while still weighed down by capital and interest.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree