Venezuelan president Hugo Chávez’s announcement in early May that the country may seek to pull out of the multilateral lending agencies, including the International Monetary Fund (IMF), was seen by many as political posturing – not least because Venezuela has paid off all outstanding debts to the World Bank and the IMF.
However, by exiting the multilaterals, existing global sovereign bonds – including three recently issued $7.5bn Petróleos de Venezuela (PDVSA) bonds – could be affected as some contain clauses that leaving the IMF constitutes a default and others are subject to cross-default provisions.
