(Bloomberg) -- Venezuela’s opposition-led National Assembly approved an offer to creditors to extend a legal deadline on the nation’s defaulted bonds until 2028.
The decision comes as creditors were preparing to sue the country for failing to pay around $60 billion in bonds before the statute of limitations period expires in October. By pushing back the deadline, the opposition seeks to avoid a wave of forced litigation, buying more time for a potential restructuring of the country’s debt.
The opposition presented the agreement “in defense of our assets abroad, the national economy, and our country’s interests,” legislator Ricardo Aponte said before the assembly on Tuesday. The agreement is unilateral and urges bondholders not to file suit to contribute to an orderly restructuring process. Ultimately, the move would still need to be endorsed by President Joe Biden’s administration for it to take effect.
READ: Venezuela Bonds Poised for Legal Extension in Creditor Talks
“I believe it was a responsible and far-sighted step in the best interests of the country,” said Claudio Zampa, founder of Switzerland-based Mangart Capital Management Ltd. and member of the Venezuela Creditors Committee. “It’s reassuring this solution has been adopted across the political spectrum.”
President Nicolas Maduro offered a similar agreement in March, but it wasn’t enforceable as his government is not recognized by US courts. A valid tolling agreement could only come from the opposition’s National Assembly, which is the institution authorized by the US to represent the country’s interest.
--With assistance from Andreina Itriago Acosta.
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