Goldman Sachs receives criticism for buying $2.8 billion of Venezuelan bonds

Venezuela's socialist government got a major boost from Wall Street financier Goldman Sachs.
By Joyce Clark | May 31, 2017
Venezuela's socialist government got a major boost from Wall Street financier Goldman Sachs. The company confirmed that it bought $2.8 billion of Venezuelan government bonds, a transaction that Venezuelan opposition leaders condemned as aiding and abetting the country's authoritarian regime.

The Wall Street Journal first broke the news Sunday in a news story that reported that Goldman Sachs paid $865 million for the bonds, which were issued by Petroleos de Venezuela, Venezuela's state-owned oil company. That purchase price that equates to 31 cents on the dollar.

Goldman Sachs confirmed the purchase on Monday. But it said that it bought the bonds from a broker and had no interactions with the Venezuelan government. It also argued that the bonds purchase reflected Goldman Sachs' good will toward Venezuela.

"We recognize that the situation is complex and evolving and that Venezuela is in crisis. We agree that life there has to get better, and we made the investment in part because we believe it will," a company statement read.

The deal has not gone over well with Venezuelan opposition leaders, however. Julio Borges, head of Venezuela's opposition-controlled congress, criticized the cut-rate bonds price as evidence that Venezuelan President Nicolas Maduro did not have the country's best interests at heart during the transaction. Borges also charged Goldman Sachs with enabling the regime to the detriment of regular Venezuelans.

"Goldman Sachs's financial lifeline to the regime will serve to strengthen the brutal repression unleashed against the hundreds of thousands of Venezuelans peacefully protesting for political change in the country," Borges wrote.

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