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Amid Venezuela default, Goldman receives 'hunger bond' payment: sources

Published 04/10/2018, 04:57 PM
© Reuters. The corporate logo of the state oil company PDVSA is seen at a gas station in Caracas
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CARACAS (Reuters) - Despite being in default on most of its debt, Venezuelan state oil company PDVSA has made a $90 million interest payment on a bond largely purchased by Goldman Sachs Group Inc (N:GS) last year in an operation that generated backlash in the crisis-stricken nation, finance industry sources said on Tuesday.

Opposition leaders in Venezuela, which is suffering from malnutrition and hyperinflation, at the time accused Goldman of giving President Nicolas Maduro a financial lifeline through the $2.8 billion deal.

They added that the operation, which provided Goldman a yield of around 50 percent, would fuel hunger in Venezuela by depriving the government of foreign exchange to import food - leading the securities to be dubbed "hunger bonds."

PDVSA completed the payment in recent days, according to the sources, who asked not to be identified. PDVSA in December said it had initiated the payment.

PDVSA and Goldman did not immediately respond to requests for comment.

News of payment on the PDVSA 2022 was first reported by the Wall Street Journal on Tuesday.

Maduro's government has halted almost all foreign debt payments, leaving Venezuela and PDVSA in default on around $40 billion in bonds, according to Thomson Reuters data.

The U.S. government has barred its citizens from buying newly issued Venezuelan debt, which has effectively locked the country out of financial markets.

© Reuters. The corporate logo of the state oil company PDVSA is seen at a gas station in Caracas

Leftist Maduro says the country is victim of an "economic war" led by the opposition with the help of United States.

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