EXPLAINER: Venezuela's billions in distressed debt: Who is in line to collect?

NEW YORK/LONDON – The toppling of President Nicolas Maduro has thrust Venezuela’s debt crisis—one of the world’s largest unresolved sovereign defaults—into the spotlight.

After years of economic turmoil and U.S. sanctions that cut the country off from international capital markets, Venezuela defaulted in late 2017 by missing payments on international bonds issued by the government and state oil company Petroleos de Venezuela, or PDVSA.

Since then, accumulated interest and legal claims tied to past expropriations have added to unpaid principal, pushing total external liabilities far beyond the original bond values.

Venezuela’s distressed debt has rallied since U.S. President Donald Trump took office in January 2025, as speculators bet on the possibility of political change.

Below is an overview of who Venezuela owes, what could be included in a restructuring, and who may be seeking repayment from Caracas.

How Much Does Venezuela Owe?

Analysts estimate that Venezuela has about $60 billion in defaulted bonds outstanding. Including PDVSA obligations, bilateral loans, and arbitration awards, total external debt stands at roughly $150–$170 billion, depending on how accrued interest and court judgments are counted.

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

A PDVSA bond originally maturing in 2020 was secured by a majority stake in U.S.-based refiner Citgo, which is ultimately owned by Caracas-based PDVSA. Citgo is now central to court-supervised efforts by creditors to recover value.

Who Holds Venezuela’s Debt?

Sanctions, including restrictions on trading Venezuelan debt, have made ownership hard to track.

The largest share of commercial creditors is likely international bondholders, including specialized distressed-debt investors, often called vulture funds.

Other creditors include companies awarded compensation through international arbitration after assets were expropriated by Caracas. U.S. courts have upheld multi-billion-dollar awards to ConocoPhillips and Crystallex, turning those claims into debt obligations and allowing creditors to pursue Venezuelan assets for repayment.

A growing number of court-recognized claimants are competing for recovery from Citgo’s parent company through U.S. legal proceedings. A Delaware court registered about $19 billion in claims for the auction of PDV Holding, Citgo’s parent company, far exceeding the estimated value of Citgo’s total assets. PDV Holding is wholly owned by PDVSA.

Caracas also has bilateral creditors, primarily China and Russia, which extended loans to both Maduro and his predecessor, former President Hugo Chavez.

Precise figures are hard to verify, as Venezuela has not published comprehensive debt statistics in years.

What About Restructuring?

Given the number of claims, ongoing legal proceedings, and political uncertainty, a formal restructuring is expected to be complex and lengthy.

A sovereign debt workout could be anchored by an IMF program that sets fiscal targets and debt-sustainability assumptions. However, Venezuela has not had an IMF annual consultation in nearly two decades and remains barred from IMF financing.

U.S. sanctions are another obstacle. Since 2017, restrictions under both Republican and Democratic administrations have sharply limited Venezuela’s ability to issue or restructure debt without explicit licenses from the U.S. Treasury.

It remains unclear how U.S. sanctions will evolve. For now, President Trump has stated that the U.S. will “run” the oil-producing nation.

What Are Potential Recovery Values?

Venezuelan bonds returned about 95% at the index level in 2025. Many currently trade between 27–32 cents on the dollar, according to MarketAxess data.

Citigroup analysts in November estimated that a principal haircut of at least 50% would be needed to restore debt sustainability and meet potential IMF conditions. Under Citi’s base case, Venezuela could offer creditors a 20-year bond with a 4.4% coupon, alongside a 10-year zero-coupon note to compensate for past-due interest. Using an exit yield of 11%, Citi estimates the net present value of the package in the mid-40s cents on the dollar, with recoveries potentially rising into the high-40s if additional contingent instruments, such as oil-linked warrants, are offered.

Other investors have suggested a wider range. Aberdeen Investments initially assumed recoveries of around 25 cents on the dollar for Venezuelan bonds, but improved political and sanctions scenarios could lift recoveries into the low-to-mid-30s, depending on deal structure and the use of oil-linked or GDP-style instruments.

Venezuela’s Economic Situation

Recovery assumptions come against a grim backdrop.

Venezuela’s economy shrank sharply after 2013, when oil production fell, inflation spiraled, and poverty surged. Although output has stabilized somewhat, lower global oil prices and discounts on Venezuelan crude limit revenue gains, leaving little room to service debt without deep restructuring. A recent U.S. blockade of sanctioned oil tankers has worsened the situation.

Trump stated that American oil companies were ready to invest in restoring Venezuelan production, but details and timelines remain unclear. Chevron is currently the only major U.S. company operating in Venezuela’s oil fields.

-Reporting by Rodrigo Campos in New York and Karin Strohecker in London; Editing by Christina Fincher/Reuters