Venezuela opposition slams Goldman Sachs for $2.8 billion bond purchase

Venezuela opposition leaders are decrying Goldman Sachs Group Inc's purchase of bonds from the government of President Nicolas Maduro.

Over the weekend, a report in the Wall Street Journal said that Goldman has paid 31 cents on the USA dollar for the bonds issued by PDVSA the state owned oil company that mature during 2022 or approximately $865 million while citing five people that were familiar with the bonds' transaction. Protesters have flooded the streets of Venezuela for months, demanding new elections and faulting President Nicolas Maduro's leadership for the country's triple-digit inflation, surging crime rates, and dire shortages of food and medicine.

"It is apparent Goldman Sachs decided to make a quick buck off the suffering of the Venezuelan people", Julio Borges, the leader in the opposition-controlled National Assembly, said in a public letter to the NY bank's chief executive, Lloyd Blankfein, reported by the Wall Street Journal. "They merely broked [sic] the bonds to Goldman, making Goldman's statement that they "bought the bonds in the secondary market and did not buy them directly from Venezuela" bull**** technical spin".

Bonds issued by Venezuela's national oil company, Petróleos de Venezuela, or Pdvsa, "have attracted some of world's most sophisticated investors", the New York Times explained. In his stead, he sent Tom Shannon, the USA undersecretary of state for political affairs, who urged Venezuela to stay in the group and defended its right to try to resolve the crisis.

Goldman Sachs was the seventh-largest holder of PDVSA bonds as of March 31, according to data compiled by Bloomberg.

A meeting of the Organisation of American States to discuss the crisis in Venezuela ended without agreement in Washington on Wednesday.

"We believe there is an global role in the rebuilding of trust among the main political actors in Venezuela as well as the reduction of tensions", Shannon said.

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

The U.S. State Department is trying to persuade countries across the Americas to pressure President Nicolás Maduro into reinstating democratic norms after he tried to dissolve Congress. The opposition government has threatened that a successor government could forgo paying the debt. "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.

Lately, the opposition's ire has affixed to a new target, one outside Venezuela's borders: Goldman Sachs.

In April, Maduro's administration announced the country would withdraw from the OAS, accusing its chief, Luis Almagro, of joining in a US -led a campaign to undermine Venezuelan sovereignty.

The humanitarian, political and economic crisis gripping Venezuela has intensified in recent months.

On the other hand, Venezuela desperately needs cash. The country's current financial situation is due to low oil prices and the effects of years of economic mismanagement. "We agree that life there has to get better, and we made the investment in part because we believe it will", the Wall Street bank affirmed.

  • Leroy Wright