Venezuela’s debt crisis is one of the largest unresolved sovereign defaults in the world, the legacy of years of economic collapse and US sanctions that severed the country from international capital markets.

The country has been in default since late 2017, when it missed payments on international bonds issued by the government and state oil company PDVSA. Since then, unpaid principal, accumulated interest and legal claims tied to past expropriations have swollen Venezuela’s total external liabilities far beyond the face value of the original bonds.

A PDVSA bond originally maturing in 2020 was secured by equity in US-based refiner Citgo, an asset now at the center of court-supervised efforts by creditors to recover value.

Venezuela’s distressed debt has ticked slightly up recently as some speculators bet on the possibility of political change. Below is a look at what could be included in an eventual restructuring and who would be knocking on Caracas’ door to collect.

HOW MUCH DOES VENEZUELA OWE ITS CREDITORS?

Analysts estimate that Venezuela has about $60 billion of defaulted bonds outstanding, while total external debt including PDVSA obligations, bilateral loans and arbitration awards stand at roughly $150-$170 billion, depending on how accrued interest and court judgments are counted.

The International Monetary Fund estimates Venezuela’s nominal GDP at about $82.8 billion for 2025, so the debt-to-GDP ratio is between 180%-200%.

WHO HOLDS WHAT?

Years of sanctions, including a prohibition to trade Venezuela’s debt, have made it hard to keep tabs on who holds what. The largest share of commercial creditors likely consists of international bondholders, including global emerging-market funds and specialist distressed-debt investors sometimes called vulture funds.

Also on the creditors list is a group of companies awarded compensation through international arbitration after assets were expropriated by the government. US courts have upheld multi-billion-dollar awards to ConocoPhillips and Crystallex among others, turning those claims into debt obligations and allowing creditors to pursue Venezuelan assets to make themselves whole.

A growing pool of court-recognized claimants is competing for recovery from Citgo’s parent company through US legal proceedings. A Delaware court registered about $19 billion in claims for the auction of PDV Holding, Citgo’s parent, which far exceeds the estimated value of Citgo’s total assets.

Caracas also has bilateral creditors, primarily China and Russia, which extended loans to both President Nicolas Maduro and his mentor, former president Hugo Chavez. Precise outstanding balances are hard to verify - Venezuela has not published comprehensive debt statistics in years.

A DISTANT RESTRUCTURING?

Despite periodic market rallies of late, a formal restructuring remains distant.

A sovereign debt workout could be anchored by an IMF program setting fiscal targets and debt-sustainability assumptions, but Venezuela has not had an IMF annual consultation in nearly two decades and remains locked out of the lender’s financing.

US sanctions are another obstacle. Since 2017, restrictions imposed under both Republican and Democratic administrations have sharply limited the government’s ability to issue or restructure debt without explicit licenses from the US Treasury.

Relations between Washington and Caracas have swung between hostile pressure and limited engagement. During President Donald Trump’s first term, sanctions escalated alongside US recognition of opposition leader Juan Guaido.

Former President Joe Biden’s administration eased some restrictions to encourage electoral commitments, but stopped short of granting broad authorization for debt talks. US action since Trump returned to office has included military pressure in the Caribbean, seizure of an oil cargo, threats of an oil blockade and a land attack.

WHAT ARE RECOVERY VALUES?

Investors are increasingly focused on what a future restructuring deal could look like.

Bonds have returned near 100% at the index level this year. The rally got a second wind in September, alongside the ratcheted-up US military presence in the Caribbean.

Citi analysts said last month that Venezuela’s debt rally reflects expectations that political change could eventually unlock restructuring talks. Based on their assumptions, a principal haircut of at least 50% would be needed to restore debt sustainability and satisfy potential conditions from the IMF.

Under Citi’s base case, Venezuela could offer creditors a 20-year bond with a coupon around 4.4%, alongside a 10-year zero-coupon instrument to compensate for past-due interest. Using an exit yield of 11%, Citi estimates the net present value of the package in the mid-40s cents on the dollar, with recoveries potentially rising into the high-40s if investors receive additional contingent instruments such as oil-linked warrants.

Other investors sketch a wider range. Aberdeen Investments said in September it had initially assumed recoveries of around 25 cents on the dollar for Venezuelan bonds, but that improved political and sanctions scenarios could lift recoveries into the low-to-mid-30s, depending on the structure of any deal and the use of oil-linked or GDP-style instruments.

WHAT IS THE SHAPE OF VENEZUELA’S ECONOMY?

Recovery assumptions sit against a grim backdrop. Venezuela’s economy shrank dramatically after 2013 when oil production fell off a cliff, inflation spiraled and poverty surged. Although output has stabilized somewhat, lower global oil prices and discounts to Venezuela’s crude prices limit revenue gains, leaving little room to service debt without deep restructuring. The recent US blockade of sanctioned oil tankers strikes at the heart of what is left of the Venezuelan economy.

Millions of Venezuelans have left their country in search of opportunities elsewhere, adding brain drain to the rebuilding uncertainty.