LONDON, Aug 18 (Reuters) - International bondholders holding more than $11 billion of Venezuela’s debt have backed an offer by the country’s opposition-led National Assembly to push back the legal deadline to sue the country for defaulting six years ago.
The Assembly, which the United States has said is authorised to negotiate with creditors due to its concerns over Venezuelan President Nicolas Maduro, said last week it had approved an offer to “toll”, or pause, the statute of limitations, extending a deadline coming up later in the year to the end of 2028.
Venezuela defaulted on roughly $60 billion worth of its international market debt in 2017. Its bonds were issued under New York law, which effectively gives their holders six years to sue the country in the event of a default.
With the toll, investors would no longer forced to sue before the six-year deadline runs out.
Maduro made the same proposal back in March, but it was not enforceable for bondholders because U.S. courts do not recognise his government.
In a statement late on Thursday the Venezuela Creditor Committee said it “welcomes the announcement made by the 2015 National Assembly and other entities recognized by the US government as representing Venezuela, PdVSA and Corpoelec tolling the statute of limitations”
It added the agreement should help avoid legal action and move toward the “ultimate goal...to ensure the future orderly and equitable process of debt restructuring and payment”.
International funds including Fidelity, T. Rowe Price, Mangart Capital Advisors, Greylock Capital Management and GMO have long been part of the creditor committee.
Legal experts are still waiting for the U.S. government to say whether it backs the opposition’s decision on the toll.
International bondholders holding more than $11 billion of Venezuela’s debt have backed an offer by the country's opposition-led National Assembly to push back the legal deadline to sue the country for defaulting six years ago.
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