Venezuela sanctions order leaves Citgo’s future in doubt | Financial Times

by Faiz Ahmed last modified 2019-08-13T08:11:34-04:00
"Last week, US president Donald Trump announced a near-total economic embargo of Venezuela, the first such step against a western hemisphere country in more than 30 years. Mr Guaidó, the National Assembly president who is recognised by the US and more than 50 other countries as Venezuela’s interim president, was quick to home in on what he said was a key victory in the executive order. ... Law firm Cleary Gottlieb, which represents creditors holding roughly $9bn worth of Venezuelan debt, issued a statement last week saying it does not “see a basis” for Mr Guaidó’s conclusion about Citgo. ... A Treasury official confirmed that interpretation: “Treasury’s authorisation and related guidance regarding the 2020 PDVSA bonds was not impacted by the [executive order] of August 5.” ... For that reason, some observers expect the Treasury to clarify the scope of Citgo’s protection before October. “I don’t really see the Treasury allowing the 2020 bondholders to enforce their claim,” said Richard Cooper, a lawyer at Cleary Gottlieb who advises the bondholder group alongside Mark Walker at Guggenheim Securities. “If they don’t change this, someone is going to get blamed for losing Citgo,” he added. “It would be a potentially big hit to the Guaidó team to lose Citgo under their watch.”"
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