Nomura bought controversial Venezuelan bonds at discount

Members of the opposition party have threatened not to honor the bonds or do business with Goldman Sachs if they do come into power.

It argued that the opposition violence was part of the plan of the “international right wing, with the complicity of the most powerful governments of the world, with the sole objective of taking control over Venezuela’s energy resources”.

The Wall Street Journal reported Sunday that the bank has bought US$2.8 billion in bonds from the state-run oil company PDVSA at a steeply discounted price.

The AN head’s threats against Goldman Sachs are the latest in an opposition campaign to deter worldwide financial institutions from lending to the cash-strapped Maduro administration amid a severe economic crisis triggered by the collapse of global oil prices.

Angel Alvarado, a Venezuelan lawmaker representing the Miranda state, said Goldman Sachs is “supporting dictatorship and repression”.

The ongoing street protests in Venezuela are fueled by a number of decisions taken by the government-controlled judiciary: First, in late 2016, it blocked a constitutional recall referendum that would have removed Maduro from power; and second, the Supreme Court nullified the National Assembly with opposition majority (a move denounced by the opposition as a coup d’état).

“This good business deal of Goldman Sachs is at our expense”, said Diana Carvallo, a 65-year-old artist who splits her time between NY and Caracas.

Through its asset management arm, GSAM, Goldman Sachs paid approximately $865m for $2.8bn worth of PDVSA bonds issued in 2014. See our post Tillerson Meets Putin: Could Russia Get Venezuela’s U.S. Refineries? and Russia-Venezuela Citgo Debt: ‘National Security Issue, ‘ Mnuchin Says.

Goldman Sachs’s asset-management unit bought the securities, sold by Petroleos de Venezuela SA, through a broker and had no interaction with the government, the New York-based firm said in a statement. Although Maduro said in March he asked the United Nations for help, he’s had a history of refusing to accept foreign aid.

Goldman Sachs has pointed out that the bonds it has purchased were bought on a secondary market and not from the government.

One elderly woman who was tear gassed said, “I am sick, I have been searching for the medicine that I can’t find, but the police are upset because people want to gather on a street corner to protest”. Mora also pointed out the risky precedent that the growing foreign interference of governments, global organizations and right-wing parties from different countries in Venezuela represents for the whole region. “Whether Goldman owns them or somebody else it really doesn’t make any difference”, said Hanke, also a senior fellow at the Cato Institute. Politicians refused to approve debt financing and then warned that future governments would not be obligated to pay back the money if Maduro secured the funds without assembly approval.

Top diplomats from across the Western Hemisphere fell short Wednesday in their bid to reach agreement about how to address Venezuela’s deteriorating democratic crisis, with some countries insisting that foreigners had no right to intervene in Venezuela’s internal affairs.

Reuters            Protesters demonstrate outside of Goldman Sachs headquarters after the company purchased Venezuelan bonds