The Venezuelan debt that Goldman Sachs bought last month may be known as “hunger bonds” to many in the international community, but they’re earning a different moniker on Wall Street: repudiation bonds.
Bloomberg News reports that in the days since that controversial transaction, numerous investors have been approached by brokers putting out initial feelers to gauge their interest in the notes, and almost without exception, they say they’re leery about securities that Venezuela’s opposition calls illegitimate and says won’t be repaid if it takes control of the government.
That they are so quick to bring up this concern marks a major victory for the band of lawmakers spearheaded by National Assembly President Julio Borges, which after being stripped of power by President Nicolas Maduro last year are seeking to wield influence in one of the only ways they can. The politicians say they’re trying to keep the government from selling debt at pennies on the dollar and raising unapproved funds that are used to buy weapons to repress protesters. (Outside observers say the initiative also more broadly seeks to deepen the government’s cash crunch and expedite its collapse.)
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