California Congressman Darrell Issa discusses the transition period for Venezuela following the arrest of Nicolas Maduro in ‘Varney & Co.’
The overthrow of Nicolas Maduro has put Venezuela’s debt crisis – one of the world’s largest unresolved sovereign defaults – in the spotlight.
After years of economic crisis and US sanctions that separated the country from international capital markets, Venezuela declared bankruptcy in late 2017 after missing payments on international bonds issued by the government and state oil company Petroleos de Venezuela, better known as PDVSA.
Since then, accrued interest and legal claims related to past expropriations have increased the unpaid principal, pushing total external liabilities far beyond the face value of the original bonds.
Venezuelan leader Nicolas Maduro can be counted on to help Russia evade US sanctions. (Matias Delacroix/Getty Images)
Venezuela’s ailing debt has risen since US President Donald Trump came to power in January 2025, as speculators bet on the possibility of political change.
Below you can see which entities owe money, what can be included in a restructuring and who may be coming to Caracas to collect.
HOW MUCH IS VENEZUELA OWED?
Analysts estimate that Venezuela has about $60 billion in defaulted bonds outstanding. However, according to analysts, the total foreign debt, including PDVSA obligations, bilateral loans and arbitration awards, is 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 of between 180% and 200%.
People walk through a market in the low-income Petare neighborhood of Caracas, Venezuela on November 16, 2024. (Reuters/File Photo)
A PDVSA bond that originally matured in 2020 was secured by a majority stake in US refiner Citgo, which is ultimately owned by Caracas-based PDVSA. Citgo is an asset now at the center of court-supervised creditors’ efforts to recover value.
WHO HAS WHAT?
Years of sanctions, including a ban on trading Venezuela’s debt, have made it difficult to keep tabs on ownership.
The bulk of commercial creditors are likely to be international bondholders, including specialist distressed debt investors known as vulture funds.
Creditors include a group of companies that received compensation through international arbitration after assets were expropriated by Caracas. US courts have upheld multi-billion dollar awards to the likes of ConocoPhillips and Crystallex, turning those claims into debt obligations and allowing creditors to pursue Venezuelan assets to heal themselves.
A growing group of court-recognized plaintiffs is fighting for recovery from Citgo’s parent company through American legal proceedings. A Delaware court 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 100% subsidiary of PDVSA.
Caracas also has bilateral creditors, mainly China and Russia, which provided loans to both Maduro and his mentor, former President Hugo Chavez.
Hugo Chavez, then president of Venezuela, gestures in front of an image of Che Guevara during his “Alo Presidente” program on October 14, 2007 in Santa Clara, Cuba. (Sven Creutzmann/Mambo photo/Getty Images)
Precise figures are difficult to verify because Venezuela has not published comprehensive debt statistics for years.
A REMOTE RESTRUCTURING?
Given the abundance of claims, legal proceedings and political uncertainty, a formal restructuring is expected to be complex and lengthy.
A debt restructuring could be anchored by an IMF program that sets budget targets and assumptions about debt sustainability. However, Venezuela has not had annual consultations with the IMF for almost two decades and remains excluded from the lender’s financing.
US sanctions are another obstacle. Since 2017, restrictions imposed under both Republican and Democratic administrations have sharply limited Venezuela’s ability to issue or restructure debt without explicit approval from the U.S. Treasury Department.
It is unclear what will happen to the US sanctions. For now, President Donald Trump has said the US will “steer” the oil-producing country.
WHAT ARE RESTORATION VALUES?
Bonds have achieved a return of approximately 95% at index level in 2025.
Many of them are currently trading between 27 and 32 cents on the dollar, MarketAxess data shows.
Citigroup analysts estimated in November that a principal reduction of at least 50% would be needed to restore debt sustainability and meet potential IMF conditionality.
In Citi’s base case, Venezuela could offer creditors a 20-year bond with a coupon of about 4.4%, in addition to a 10-year zero-coupon bond to compensate for unpaid interest. Based on an 11% exit yield, Citi estimates the net present value of the package in the mid-40s cents on the dollar, with recoveries potentially rising above the 40s if Venezuela were to hand out additional contingent instruments such as oil-linked warrants.
A motorcyclist passes an oil-themed mural in Caracas, Venezuela. (Javier Campos/NurPhoto/Getty Images)
Other investors paint a broader scope. Aberdeen Investments said in September it initially expected a recovery of around 25 cents on the dollar for Venezuelan bonds, but that improved political and sanctions scenarios could push the recovery into the low-to-mid 30s, depending on the structure of a deal and the use of oil-related or GDP-like instruments.
WHAT IS THE ECONOMIC SITUATION OF VENEZUELA?
Assumptions about recovery take place against a grim backdrop.
The Venezuelan economy shrank dramatically after 2013, when oil production fell off a cliff, inflation soared and poverty soared. While production has stabilized somewhat, lower global oil prices and discounts in Venezuelan crude oil prices are limiting revenue growth, leaving little room to pay down debt without deep restructuring. The recent US blockade of sanctioned oil tankers has worsened the situation.
Trump said U.S. oil companies were willing to take on the difficult task of entering Venezuela and investing to restore production, but the details and timelines remain unclear. Chevron is the only US major currently active in Venezuela’s oil fields.
