Maduro Regime Forced to Buy Its Own Bonds as Markets Shun Venezuela

By: Karina Martín - Jan 3, 2017, 12:28 pm
The Venezuelan government has issued highly dubious bonds in a bizarre deal with China (
The Venezuelan government has issued highly dubious bonds in a bizarre deal with China (Diario Republica).


The Venezuelan government signed a contract with a Chinese bank for a $5 billion loan, based on bonds which will allegedly be issued in the future, which was classified as illegal by a congressman.

“On December 29 Maduro‘s government illegally signed a loan with a Chinese bank for USD $5 billion,” warned the deputy and member of the National Assembly (AN) Finance Committee, José Guerra, through his Twitter account.

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The loan will be canceled in full by the year 2036, and will be added to the substantial list of other Venezuelan debt acquired by China. The bonds will allegedly be bought entirely by the Banco Central de Venezuela, and Banco de Venezuela, according to Reuters.

The intention of the loan, said the economist Asdrúbal Oliveros, is mainly “to pay suppliers in the oil, pharmaceutical, and food industries.”

The unofficial source was quoted by Reuters as saying “the operation is highly unorthodox” and “does not provide new funds immediately for Venezuela.”

Both by Central Bank of Venezuela (BCV) and the Ministry of Finance have assured that they have “no records of the operation”, which was undertaken as a private placement at the end of the last week of 2016.

The operation consists of Venezuela‘s issuance of USD $5 billion in bonds maturing in 2036, with an annual interest rate of 6.5%, in stark contrast to the yields of more than 20% that investors currently demand to hold Venezuelan bonds in the open market.

The bonds are to be acquired by the state Banco de Venezuela, at the protected exchange rate (Dipro) of 10 bolivares fuertes to the dollar. Russ Dallen, a partner at Caracas Capital Markets brokerage, said the deal looks like “New Year’s joke.”

“I thought it was a New Year’s joke, or a fake news,” he said. “There’s no way someone in a market buys this,” he added.

The sale is the latest financial maneuver deployed by the administration of President Nicolás Maduro due to low oil prices and more than a decade of populist spending that has left the government in shambles, according to the The Wall Street Journal.

Sources: The Wall Street Journal, Panorama, Efecto Cocuyo

Karina Martín Karina Martín

Karina Martín is a Venezuelan reporter with the PanAm Post based in Valencia. She holds a bachelor's degree in Modern Languages from the Arturo Michelena University.

UN Officials Party with FARC Guerrillas They Are Supposed to Monitor

By: Julián Villabona Galarza - Jan 3, 2017, 11:43 am

EspañolThe news agency EFE recently published videos in which members of the United Nations verification mission are observed dancing with FARC guerrillas during New Year's Eve festivities in El Conejo, a municipality located in Colombia's northeastern La Guajira state, near the Venezuelan border. The video has gone viral on social networks, calling into question the neutrality of participants in the UN mission. This latest incident comes on the heels of a public dispute between the mission, and the governor of the northwestern Antioquia department, who expressed grave concerns over prostitution and trafficking of children in the FARC's pre-grouping camps. The UN denied the governor's allegations. Read More: Colombia: FARC Violate Demobilization Terms in New Year's Bash Read More: Colombia Passes Amnesty Law for FARC Guerrilla Crimes The guerrillas remain in such "pre-grouping" camps, waiting for orders from their superiors to move to the so-called "concentration zones" where they will face a day of legal reckoning and begin to aid in the reparations process for the victims, as established in the FARC-Santos Peace Agreement, which is overseen by the UN. googletag.cmd.push(function() { googletag.display('div-gpt-ad-1459522593195-0'); }); Thus far the FARC has not started its movement to the concentration zones, citing a lack of guarantees. Their first grievance was the lack of an Amnesty Law that was recently approved. Their second grievance is the lack of suitable housing in the concentration zones, which was promised by the Colombian government. However, they have said that they will not delay the timeline. There remains a great deal of uncertainty about dissidents within the guerrilla group, since there are many members who do not want to demobilize but plan to continue in illegal businesses, such as drug trafficking and illegal mining, which have long provided the FARC with lucrative income streams. Source: La FM

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