The team behind Venezuela’s US-backed opposition leader Juan Guaidó is growing increasingly optimistic that he will be able to implement his detailed economic recovery plan, a close adviser has told GlobalMarkets.
Some 60 nations and several multilateral bodies have recognised Guaidó as Venezuela’s interim president, although President Nicolás Maduro still holds power.
Alejandro Grisanti — whom Guaidó has named director of state oil giant PDVSA’s board and restructuring adviser — said there was a “shared vision” for turning the economy around.
“It took us three years, but for the first time we have a consensus — including private chambers, politicians, economists, academics and the international community — on the diagnosis of what has happened and what is needed to solve it,” Grisanti told GlobalMarkets. “This consensus makes our [recovery] plan more robust and makes me particularly optimistic.”
Despite US sanctions and a humanitarian crisis that has driven some 4.5 million Venezuelans to emigrate, observers say there is little prospect Maduro will leave power.
Meanwhile, PDVSA is set to default on the only Venezuelan bond not already in default.
“Regime change in Venezuela is today as far away as it has ever been,” said Graham Stock, head of emerging market sovereign research at BlueBay Asset Management.
The sanctions have also hurt bondholders. Earlier this year the US Treasury barred US persons from buying Venezuelan debt, even in secondary markets. The minimal trading that does occur — mostly US long-only funds selling to European private banks, GlobalMarkets understands — has recently been at eight or nine cents on the dollar.
“The regime change movement is somewhat stuck in the mud, and bond prices tell you that people are giving up,” said Daniel Osorio, president of Andean Capital Advisors, which advises institutional asset managers on Latin American politics and economics.
Guaidó’s position may be weakened by PDVSA’s imminent default. Its board is not expected to make a $913m bond payment due on October 28. That would theoretically allow creditors to seize the collateral: 50.1% of the company’s US refinery, Citgo.
“Supposedly there is a debate going on as to whether they will be able to enforce, or whether the US [which supports Guaidó] will act to protect Guaidó’s team’s assets, but I have so far seen no inclination of an executive order that would prevent creditors from enforcing their rights,” said Osorio.