(Bloomberg) - Venezuelan bonds are poised to gain after the US captured Nicolás Maduro, setting the stage for a potential regime change that investors in $60 billion worth of securities have long been betting on.
Defaulted notes from the sovereign and state-run oil company PDVSA have already more than doubled to between 23 and 33 cents on the dollar in the past few months as US President Donald Trump ramped up pressure on Maduro. While still far out, the prospect of a potential debt restructuring — a key step needed to help attract new funding — could fuel further gains, bringing so-called recovery prices to 50-60 cents, investors said.
“Venezuela continues to face severe liquidity constraints, and any eventual restructuring process would likely be long and complex,” said Alberto Rojas, a senior EM strategist at UBS. “For now, however, the market appears less focused on long-term fundamentals and more on the repricing of political optionality — a scenario that, until recently, many investors viewed as highly remote.”
The prospect is a stark turnaround for the outlook of the bonds, which just over two years ago traded for pennies on the dollar.
“The immediate goal was the removal of Maduro. Objective achieved,” said Robert Koenigsberger, founder and chief investment officer at Gramercy Funds Management. “Now the path forward is dependent on what type of regime change ensues. Also, understanding the role of the US in the transition will be key.”
The US will run Venezuela until a leadership transition can be organized, Trump said at a press conference on Saturday. It will be done “with a group” largely comprised of senior US officials and with an emphasis on repairing oil infrastructure.
Ray Zucaro, chief investment officer at RVX Asset Management LLC in Miami, is among investors who have been scooping up the bonds. As Trump sent US troops to the Caribbean to carry out strikes on alleged drug-trafficking boats, bets that the regime would fall grew. Gains had ebbed recently as some worried the socialist leader would manage to cling to power as he did in 2019 and 2024.
“If the US really ends up running the show, working with the current administration and maximizing oil output, that could ultimately be a windfall for Venezuela, including its debt,” Zucaro said. “So much money has left the country that you can have a real opportunity to have an influx of capital.”
A key point for investors is the role Venezuelan Vice President Delcy Rodriguez will play. Secretary of State Marco Rubio had been in contact with Rodriguez, Trump said on Saturday, adding he expected her cooperation. That boosted hopes of a more orderly transition.
But just hours later, Rodríguez called for Maduro’s return, saying the US action was “barbaric.”
The VP “will be under immense pressure to cooperate with the US if she wants to stabilize an interim government and de-escalate, but also needs to maintain a certain rhetoric for domestic consumption,” Eurasia Group analyst Risa Grais-Targow said. “Bondholders will be looking for any signs of political stability and welcome an administration that is willing to work with the US.”
Tricky Restructuring
A resolution for Venezuelan debt could prove tricky. The country has to unwind a $154 billion web of defaulted bonds, loans and legal judgments owed to creditors from Wall Street to Russia. A restructuring, Gramercy’s Koenigsberger said, would likely only take place once a permanent government is in place.
Trump offered few details of how the US will run the South American nation, or for how long. He dismissed the idea of working with Nobel Peace Prize winner María Corina Machado — who many had expected to play a role.
“If the new regime is acceptable to the US, then maybe Venezuela can count on serious support for reconstruction. In that scenario, as regaining access to capital markets starts to be discussed, debt restructuring possibilities will come into play,” said Hari Hariharan, chief investment officer at NWI Management in New York.
Hariharan said recovery value talks could be around 50 to 60 cents on the dollar. “The challenge will then be in what time frame,” he added.
For now though, there’s optimism a regime change could potentially help reinsert the country into the global economy after a decade-long economic collapse that triggered the worst refugee crisis in the history of the Western hemisphere.
“The restructuring becomes more likely and shorter term if the US is involved. With strong investment, they will rebuild oil production capacity very quickly,” said Francesco Marani, who trades Venezuelan and state oil company debt for Spain-based Auriga Global Investors SV SA.
Venezuela defaulted on debt starting in 2017, two years before the US cut ties with Maduro’s government and imposed a ban prohibiting US investors from buying the country’s debt. Trading volumes are still low today, and dominated by hedge funds and distressed specialists. JPMorgan Chase & Co. added the bonds back to its widely followed indexes after the reversal of the secondary trading sanctions in 2023.
Since then, betting on the bonds has become among the most profitable trades in the developing world, with gains accelerating last year amid a broader increase in risk-appetite. Junk-rated sovereign debt from nations that have enacted reforms or exited default, including Lebanon and Ukraine, also delivered stellar returns in 2025.
