Venezuela’s opposition asked to back suspending statute of limitations on bond repayments

CARACAS (Reuters) – Venezeula’s political opposition – recognized by the U.S. as the country’s legitimate government – was asked by a key creditor group on Monday to back the suspension of a statute of limitations on repayments for defaulted government bonds.

President Nicolas Maduro’s government in March proposed a five-year suspension through 2028 or until the United States lifts sanctions that impede a debt restructuring.

A deadline on some bonds is set to expire in October, six years after the Venezuelan government stopped paying down the debt, meaning those bond holders could lose their right to ask courts to order repayment.

The Venezuela Creditors Committee (VCC) which holds billions of dollars in defaulted Venezuelan bonds said in a statement it wanted the opposition to lend its support to the proposal.

The opposition has yet to take a stance on the issue.

“Without such an agreement… significant risks remain,” the statement said, noting the potential for additional litigation that could disrupt trade and other efforts to boost Venezuela’s ailing economy.

The opposition-controlled national assembly this month received a license from the U.S. Department of the Treasury to carry out debt settlement deals with the Maduro government and state oil company PDVSA.

Venezuela and PDVSA owe more than $60 billion in bonds that they stopped payment on in late 2017, triggering the default. The VCC represents creditholders for some $10 billion of that debt.

The bonds were issued under New York state law and include a statute of limitations clause stating that the interest payments due to bondholders is not legally enforceable after six years of non-payment.