It is essential that the next administration act to prevent this from happening.
In 2016, the Venezuelan government was desperately seeking financing, with not much success. The economy was crumbling and the state was already over-indebted, with foreign debt obligations exceeding 150 billion dollars, about six times the country’s oil exports of that year. In an attempt to resolve the situation, the Venezuelan government first asked some of its bondholders to swap their bonds closed to maturity for new bonds maturing in 2020. To secure the deal, worth around $3.4 billion, the government collateralized the new bonds with 50.1 percent shares of Citgo Petroleum Corporation, its American-based oil company. Later that year, the Venezuelan government mortgaged the remaining 49.9 percent of Citgo’s shares to the Russian oil company, Rosneft, for a loan worth $1.5 billion.