Venezuela is preparing to reveal a total debt burden of $240 billion, substantially higher than market expectations which ranged from $150 billion to $200 billion. This disclosure marks the prelude to what is anticipated to be the world's largest sovereign debt restructuring. The country has been in default on its external debt since 2017, with defaulted bonds from the government and state oil firm PDVSA totaling approximately $60 billion.
The South American nation, which announced its intention to restructure its external debt last month, plans to present an update on its financial position to creditors in the coming weeks. U.S. advisory firm Centerview Partners has been engaged by Caracas to assist in developing a plan for debt sustainability, with the blueprint expected to be released in early July. Venezuela will also publish a macroeconomic framework by the end of June 2026, which will estimate its economy at around $100 billion, placing its debt-to-GDP ratio above 200%.
The overarching goal of this comprehensive restructuring is to restore public debt sustainability, which is crucial for attracting external financing, enabling public investment, and re-engaging with the international financial system. The process will be guided by principles of sustainability, comprehensiveness, good faith, transparency, and celerity. It will encompass all relevant external public sector obligations, including Eurobonds from the Republic and PDVSA, through a unified process. The country's commitment to a rapid, consensual resolution aims to benefit the Venezuelan people.
