Goldman Sachs Begins Selling Some of Controversial Venezuelan Bonds
Goldman Sachs Asset Management has begun selling some of the $2.8 billion in Venezuelan bonds it acquired in a deal involving the country’s central bank
.. The Wall Street firm’s asset-management arm sold at least $300 million face amount of the bonds to a small group of hedge funds in recent days
.. GSAM’s purchase of the bonds in May drew harsh criticism from Venezuelan opposition leaders and some investors for supplying cash to the authoritarian regime of President Nicolás Maduro.
.. Four or five hedge funds in London and New York bought the bonds of state-owned oil company Petróleos de Venezuela SA, or PdVSA, due in 2022 from Goldman for about 32.5 cents on the dollar, slightly more than the 31 cents the firm paid when it purchased the bonds from Venezuela’s central bank in May
.. Goldman sold the debt to promote trading of the bonds, which the firm hopes will push prices up and legitimize the securities in the eyes of other investors
.. some firm executives have said privately that Goldman’s chief mistake wasn’t in buying the bonds—which it felt it obligated to do on behalf of clients in its funds—but in going it alone, buying nearly all of the $3 billion issuance.
.. Goldman and the new buyers of the debt are betting that a regime change in Venezuela could lift bond prices even if the country defaults.