Venezuela’s debt crisis under spotlight after Maduro’s ouster

The overthrow of Nicolas Maduro has thrust Venezuela’s debt crisis – one of the world’s largest unresolved sovereign defaults – into the spotlight.

After years of economic crisis and American sanctions which cut the country off from the international scene capital markets, Venezuela defaulted in late 2017 after missing payments on international bonds issued by the government and the state oil company, Petroleos de Venezuela, known as PDVSA.

Since then, accrued interest and legal claims related to past expropriations have added to the unpaid principal, inflating the total external liabilities well beyond the face value of the original obligations.

Venezuela’s troubled debt has recovered since the US president Donald Trump came to power in January 2025 as speculators bet on the possibility of political change.

Below is a look at which entities are owed money, what could be included in a restructuring and who could be knocking on Caracas’ door to collect it.

HOW MUCH DOES VENEZUELA OWE?

Analysts estimate that Venezuela has about $60 billion in defaulted bonds. However, total external debt, including PDVSA bonds, bilateral loans and arbitration awards, amounts to around $150 billion to $170 billion, depending on how accrued interest and court judgments are taken into account, analysts say.

The International Monetary Fund estimates Venezuela’s nominal GDP at around $82.8 billion for 2025, implying a debt-to-GDP ratio of between 180% and 200%.

A PDVSA bond initially maturing in 2020 was secured by a majority stake in U.S. refiner Citgo, which is ultimately owned by Caracas-headquartered PDVSA. Citgo is now an asset at the center of creditors’ court-supervised efforts to recoup their value.

WHO SAYS WHAT?

Years of sanctions, including a trading ban Venezuela’s debt, made it difficult to control property.

The largest share of commercial creditors is likely to be international bondholders, including specialist distressed debt investors, sometimes called vulture funds.

Among the creditors is a group of companies that won compensation through international arbitration after Caracas expropriated their assets. U.S. courts have upheld multibillion-dollar awards to ConocoPhillips and Crystallex, among others, turning those claims into debt securities and allowing creditors to pursue Venezuelan assets to recover.

A growing number of court-recognized claimants are fighting to seek relief from Citgo’s parent company through U.S. court proceedings. A Delaware Court has recorded approximately $19 billion in claims for the auction of PDV Holding, Citgo’s parent company, which far exceeds the estimated value of Citgo’s total assets. PDV Holding is the wholly owned subsidiary of PDVSA.

Caracas also has bilateral creditors, mainly China and Russia, which have provided loans to Maduro and his mentor, former President Hugo Chavez.

Precise figures are difficult to verify since Venezuela has not published comprehensive debt statistics in years.

REMOTE RESTRUCTURING?

Given the plethora of claims, legal proceedings and political uncertainty, a formal restructuring promises to be complex and lengthy.

A sovereign debt restructuring could be anchored by an IMF program setting fiscal targets and debt sustainability assumptions. However, Venezuela has not had an annual IMF consultation in almost two decades and remains excluded from the lender’s financing.

Another obstacle is US sanctions. Since 2017, restrictions imposed by Republican and Democratic administrations have significantly limited Venezuela’s ability to issue or restructure debt without explicit authorization from the U.S. Treasury.

It is unclear what will happen to the US sanctions. For now, President Donald Trump has said the United States will “run” the country. oil-producing nation.

WHAT ARE THE RECOVERY VALUES?

Bonds returned approximately 95% at the index level in 2025.

Many of them are currently trading between 27 and 32 cents on the dollar, according to MarketAxess data.

Citigroup analysts estimated in November that a core haircut of at least 50% would be needed to restore debt sustainability and meet potential IMF conditions.

In Citi’s base case scenario, Venezuela could offer its creditors a 20-year bond with a coupon of around 4.4%, as well as a 10-year zero-coupon note to offset arrears in interest. Using an exit yield of 11%, Citi estimates the net present value of the package at around 40 cents on the dollar, with rallies that could reach 40 cents if Venezuela distributes additional contingent instruments such as oil-linked warrants.

Other investors sketch a broader range. Aberdeen Investments said in September that it had initially forecast a recovery of around 25 cents on the dollar for Venezuelan bonds, but that improved policy and sanctions scenarios could take the recovery into the low to mid-30s, depending on the structure of any deal and the use of oil-linked or GDP-like instruments.

WHAT IS THE ECONOMIC SITUATION IN VENEZUELA?

The recovery hypotheses take place in a gloomy context.

Venezuela’s economy The country declined significantly after 2013, when oil production collapsed, inflation soared and poverty increased. Although production has stabilized somewhat, falling global oil prices and discounts to Venezuelan crude prices are limiting revenue gains, leaving little room to service debt without deep restructuring. The recent US blockade of sanctioned tankers has exacerbated the situation.

Trump has said U.S. oil companies are ready to tackle the difficult task of entering Venezuela and invest to restore production, but details and timelines remain unclear. Chevron is the only American major currently present in Venezuela’s oil fields.