Tuesday, June 6, 2017

Goldman, Nomura Heeded Warnings Before Venezuela Bond Deal

By Corina Pons, Marianna Parraga and Olivia Oran
In early May, Goldman Sachs (GS.N) turned down a request from Caracas to convert $5 billion in sovereign bonds into marketable securities partly because it would mean dealing directly with a Venezuelan state bank, according to people familiar with the talks.
The complexity of the operation was the primary concern for Goldman, but the Wall Street bank also weighed reputational risks after opposition politicians called it to warn about the potential damage of being seen as aiding President Nicolas Maduro's administration, according to an advisor to opposition lawmakers and a person familiar with the discussions. Both declined to be named because the talks were private.
The warnings were part of a campaign by opposition lawmakers, economists and lawyers to cut off Wall Street financing for Maduro. Aware that his cash-strapped administration was seeking funds, they dispatched letters in recent months to the heads of 13 major banks, including Goldman Sachs boss Lloyd Blankfein, flagging the risks of financing a government which has been criticized internationally for human rights abuses and economic mismanagement.
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Source: Reuters

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