Accordingly, more than in any other sovereign debt workout in recent history, the architects of Venezuela’s debt restructuring must find a way to neutralize the threat posed by holdout creditors.

Venezuela’s commercial contacts with the United States are far more extensive than any emerging market country that has restructured its external debt in the last 25 years; vastly more extensive than those, for example, of Argentina. PDVSA sells large amounts of oil to U.S. buyers, resulting in a steady stream of payments from U.S. sources back to Venezuela.6 Those payment streams will act as a beckoning finger to the plaintiffs’ bar in a default scenario. Accordingly, more than in any other sovereign debt workout in recent history, the architects of Venezuela’s debt restructuring must find a way to neutralize the threat posed by holdout creditors. 

 6 Approximately 75% of Venezuela’s oil revenue is reported to come from sales of oil and oil products to the United States. Jim Wyss et al., Threat of U.S. Sanctions on Venezuela Sparks Fears of Economic ‘Collapse’, MIAMI HERALD, Jul. 18, 2017.