Sat | Sep 23, 2017

Goldman under fire for buying Venezuela ‘hunger bonds’

Published:Wednesday | May 31, 2017 | 5:00 AM

Venezuela opposition leaders are decrying Goldman Sachs Group Inc's purchase of bonds from the government of President Nicolas Maduro.

The Wall Street Journal reported Sunday that the bank has bought US$2.8 billion in bonds from the state-run oil company PDVSA at a steeply discounted price.

Opposition leaders immediately accused the bank of getting in bed with a deeply unpopular administration that has been the target of two months of near-daily protests.

The president of the opposition-led Congress accused the bank of propping up a dictatorship. Julio Borges said the Goldman Sachs purchase violated the bank's own code of conduct.

In a statement, the bank acknowledged it purchased the bonds, but said they were purchased through the secondary market and not directly from the Venezuelan government. The bank did not say in its statement how much it paid for the bonds; however, the Journal, citing unnamed sources, said the bank paid US$865 million for the US$2.8 billion in bonds, roughly 31 cents on the dollar.

"We are invested in PDVSA bonds because, like many in the asset management industry, we believe the situation in the country must improve over time," the bank said.

- AP