PDVSA bonds: an exchange needs a yes from almost 100% of holders

An exchange of PDVSA bonds needs almost 100% of its holders to sign on. A rule of law imposes it.

PDVSA issued those bonds under the US Trust Indenture Act of 1939. Its Section 316(b) protects each holder’s right to payment. No majority can change that right without the holder’s individual consent. In practice, any holder can block the restructuring of its bond.

Where it comes from

The finding comes from C4Accel’s own study on Venezuela’s external debt. Its cut-off date is April 2026.

The study compares the rules of each type of bond. Most of the Republic’s sovereign bonds carry collective action clauses. With them, a qualified majority binds the minority that does not accept. That threshold runs from 75% to 85%, depending on the series.

PDVSA bonds cannot carry those clauses. Each holder keeps an effective veto over its payment terms. That is why an ordinary exchange requires voluntary participation close to 100%. The alternative is an exchange offer with strong incentives, aiming above 90%.

The study finds no modern precedent for this constraint in a sovereign in default. Argentina did not face it in 2005, nor Ecuador in 2008 or 2020.

The veto weighs more because of a second fact. Only 40% of the debt has an identified holder. The remaining 60% is in the hands of anonymous retail investors, opaque funds and confidential bilateral agreements. Summoning and notifying scattered holders is already hard. With an individual veto, every holder who does not show up is an open risk.

Size completes the picture. Total external debt stands between $150 billion and $170 billion. Against the nominal GDP the IMF estimates, it equals 180–200% of GDP.

Which decision it changes

For a C-suite executive, the veto changes three variables in the plan.

The timeline. A PDVSA exchange does not close by majority. It requires convincing almost everyone, or paying incentives to get there. A business plan that assumes a quick PDVSA restructuring assumes the least likely outcome.

The study gathers five exchange strategies under discussion. One, the global exchange with aggregated clauses, works only for sovereign bonds. The others range from a voluntary offer with incentives to a buyback like Ecuador’s in 2008. Meanwhile, secured holders prefer to collect through the courts, by seizing assets.

The exposure of your assets. A US appeals court confirmed that PDVSA is the Republic’s alter ego. Creditors of one can pursue the assets of the other. Operating through PDVSA or its subsidiaries does not, by itself, protect against those seizures. While the debt stays unpaid, any new asset in the country carries a latent attachment risk.

The price. The leading investment banks expect to recover between 25 and 50 cents on the dollar. Treat that figure as a consensus scenario, not a firm projection. The spread between types of creditor is wide. For unsecured PDVSA bonds, the study estimates between 15 and 30 cents. In April 2026 those bonds traded at around 20 cents.

If your company buys debt, collects from the State or invests here, these three variables change your number. They also change the order in which it pays to act.

What else is behind it

The full study has eight chapters. This article touches only three of its pieces. Behind it are, among others:

• The Citgo auction and the order in which creditors collect in Delaware.
• The debts with China and Russia, under contracts that are not public.
• The arbitration awards competing for the same assets.
• A four-tier recovery ranking, by type of creditor.
• The legal debate over the odious debt doctrine.

Each piece changes the answer depending on where your company stands.