Venezuelan opposition criticizes Goldman Sachs' $2.8B bond buy

Venezuelan opposition criticizes Goldman Sachs' $2.8B bond buy

Venezuelan opposition criticizes Goldman Sachs' $2.8B bond buy

Goldman recently bought $2.8 billion worth of PDVSA bonds maturing in 2022, at a 70 percent discount to the market price. Borges said the "fire sale nature" of the deal showed the embattled president, Nicolás Maduro, did not have the country's best interests in mind when he agreed to the transaction. In its original statement, the bank said: "We recognize that the situation is complex and evolving and that Venezuela is in crisis".

It shouldn't come as a surprise that anti-Maduro forces might resent a bank stepping in to prop up the market for Venezuelan bonds at such a moment.

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

Julio Borges is the Venezuelan President of the National Assembly who denounced president Maduro's ties with U.S. bankers, after The Wall Street Journal reported that Goldman Sachs had bought $2.8 billion worth of bonds issued by the state-run PDVSA oil company.

Yesterday, Julio Borges, President of Venezuela's National Assembly, sent Goldman Sachs Chief Executive Officer Lloyd Blankfein a letter accusing the firm of trying to “make a quick buck off the suffering of the Venezuelan people, ” according to a copy seen by Bloomberg.

Nicaragua, a staunch ally of Venezuela, opposed the crisis meeting altogether, arguing Venezuela was the victim of a "political lynching".

Maduro confirmed earlier this month that presidential elections would be held as scheduled by the constitution in 2018, while the country's National Electoral Board has scheduled regional elections for December 10, 2017. The collapse of the price of oil and widespread economic mismanagement has generated shortages of nearly everything, including power, food and medicine.

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Venezuelans supporting the Maduro government marched Wednesday in Caracas under the banner of rejecting worldwide intervention and sending a message to the representatives meeting in Washington that - as socialist politician Elias Jaua put it - Venezuela's sovereignty must be respected.

Two leading Venezuelan opposition figures were wounded in anti-government protests Monday, as demonstrators vowed to intensify pressure on President Nicolas Maduro and against his plans to hold a constitutional assembly.

"But none of those firms carry Goldman's reputation for being politically influential and financially opportunistic - a combination that has made it an easy global punching bag", the Times explained.

Goldman Sachs did not say in its statement how much it paid for the bonds.

Shortly after the meeting, Venezuela's Foreign Minister Delcy Rodriguez stated that the "interventionist bloc in the OAS continue to be defeated by the honorable states of the region", announcing that she herself will attend the OAS general meeting set for June 19-21, in Cancun, Mexico with the support of the people of Central America, the Caribbean, ALBA nations and all of Latin America.

Fintech Advisory Inc., a New York-based investment fund, previously agreed to buy $1.3 billion of PDVSA bonds in a repo transaction providing at least $300 million of cash, Reuters reported in early April.

Part of the explanation for Goldman's move is it may be banking on a change of leadership more open to economic reforms that could ensure the means to pay debt, and buoy bond prices. Maduro himself would probably say this transaction is a ideal example of the "savage capitalism" he says he despises.

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