Sovereign haircuts / VEN
Venezuela
9 concluded restructurings, between 1840 and 1990. The earliest default they settle began in 1826. The worst cost creditors 92.4% of the present value of their claim, in 1881. The longest gap between a default and its settlement was 17 years.
Every restructuring
Two measures of the same deals, never combined. The present-value haircut discounts what creditors got against what they were owed; the face-value reduction counts only principal written off.
| Default | Settled | Years to settle | Present-value haircut | Face-value reduction | Debt treated (2020 $) | Source |
|---|---|---|---|---|---|---|
| 1826 | 1840 | 14 | 80.9% | 0.0% | $418M | Meyer, Reinhart and Trebesch (2022) |
| 1847 | 1859 | 12 | 52.3% | 1.6% | $462M | Meyer, Reinhart and Trebesch (2022) |
| 1860 | 1862 | 2 | 34.0% | 0.0% | $474M | Meyer, Reinhart and Trebesch (2022) |
| 1864 | 1881 | 17 | 92.4% | 60.2% | $717M | Meyer, Reinhart and Trebesch (2022) |
| 1892 | 1893 | 1 | 2.5% | 0.0% | $329M | Meyer, Reinhart and Trebesch (2022) |
| 1898 | 1905 | 7 | 39.3% | 12.9% | $584M | Meyer, Reinhart and Trebesch (2022) |
| 1983 | 1986 | 3 | 9.9% | 0.0% | $41.28B | Cruces and Trebesch (2013) |
| 1983 | 1988 | 5 | 4.3% | 0.0% | $39.02B | Cruces and Trebesch (2013) |
| 1989 | 1990 | 1 | 36.7% | 6.8% | $34.81B | Cruces and Trebesch (2013) |
Source: Meyer, Reinhart & Trebesch (2022), Sovereign Bonds since Waterloo | Cruces & Trebesch (2013), Sovereign Defaults: The Price of Haircuts | Asonuma & Trebesch (2016) Debt treated is the amount restructured, deflated to constant 2020 US dollars in the source file. A negative haircut means the new instruments were worth more than the old claim. Methodology
Bond prices
5 of 9 Venezuela restructuring episodes have Waterloo prices during the restructuring interval
price only, never pbid or pask, and shows one line per bond from one year before default to one year after settlement. The author README defines price as “bond price in GBP and USD”; it does not document normalization to face value. Across all 329 haircut episodes, 111 have no Waterloo country-code match and 177 start after Dec 1, 1980. Those two counts overlap. 3 of 9 episodes start after the panel ends. 1 episode overlaps the panel but still has no non-null price observations in that window.| Bond | Currency | ISIN | Obs. | First | Last |
|---|---|---|---|---|---|
| 3% Consolidated Bonds of 1881 | GBP | not recorded | 120 | Jan 1, 1897 | Dec 1, 1906 |
| 3% Diplomatic Bonds of 1905, due 1950 | GBP | not recorded | 15 | Oct 1, 1905 | Dec 1, 1906 |
waterloo_bonds.price only; pbid and pask are not averaged into it. The author README defines price as “bond price in GBP and USD” and does not document face-value normalization. GBP and USD observations use separate labelled panels and y-axes. Of the 329 episodes in the haircut file, 111 have no Waterloo country-code match and 177 start after 1980-12-01; these counts overlap. Later episodes show an absence message rather than an implied zero.Source: Meyer, Reinhart & Trebesch, Sovereign Bonds since Waterloo (bond-price panel) | Harvard Dataverse, Sovereign Bonds since Waterloo Methodology
Default spells
| Spell | From | To | Years | Restructurings |
|---|---|---|---|---|
| VEN_1826-1840 | 1826 | 1840 | 15 | 1 |
| VEN_1847-1881 | 1847 | 1881 | 35 | 3 |
| VEN_1892-1893 | 1892 | 1893 | 2 | 1 |
| VEN_1898-1905 | 1898 | 1905 | 8 | 1 |
| VEN_1983-1990 | 1983 | 1990 | 8 | 3 |
Source: Meyer, Reinhart & Trebesch (2022), Sovereign Bonds since Waterloo | Cruces & Trebesch (2013), Sovereign Defaults: The Price of Haircuts | Asonuma & Trebesch (2016) Duration counts both endpoints. The spells table also carries a cumulative-haircut column; it is not published here because it does not reconcile with the per-episode haircuts, see the methodology. Methodology
The Cruces-Trebesch record: a third measure and the discount rate
The Cruces-Trebesch file carries 3 restructurings here, and adds the market haircut (the new instruments against the face value of the old claim, undiscounted) and the exit yield used to do the discounting. The deal label is the file’s own and is finer than the country: it names the instrument class the deal covered. The two files were assembled separately, so a deal here need not line up one-to-one with a row above.
| Deal | Date | Present value | Market | Face value | Exit yield | Structure | Data quality |
|---|---|---|---|---|---|---|---|
| Venezuela | 1986-02-01 | 9.9% | 12.6% | 0.0% | 12.3% | - | 2 / 5 |
| Venezuela | 1987-09-18 | 4.3% | 6.8% | 0.0% | 12.4% | - | 3 / 5 |
| Venezuela | 1990-12-01 | 36.7% | 52.8% | 6.8% | 16.6% | Brady deal | 4 / 5 |
Source: Cruces & Trebesch, haircut dataset (2014 update) Data quality is the file's own 1-to-5 index of how well the deal terms are documented. Methodology
Debt still in default
$96.43B across 6 creditor classes in 2024. A haircut can only be measured once a restructuring concludes, so any of this that is still being negotiated is by construction absent from the tables above.
| Creditor class | In default, 2024 |
|---|---|
| Foreign-currency bonds | $53.23B |
| Other private creditors | $16.39B |
| China (official) | $12.00B |
| Paris Club (bilateral official) | $8.69B |
| Other official creditors | $3.60B |
| Inter-American Development Bank | $2.51B |
Source: Bank of Canada-Bank of England Sovereign Default Database (CRAG) Bank of Canada terms (attribution). Includes domestic arrears, so it is not comparable with the debt-treated column above. Methodology
Restructurings with Chinese creditors
5 restructurings with Chinese creditors are recorded here. No haircut is attached to any of them, so they cannot be placed on the scale above; the file records only whether face value or the interest rate was cut.
| Year | Type | Creditor | Terms |
|---|---|---|---|
| 2014 | Debt rescheduling only | China Development Bank | In 2014, China Development Bank restructured the repayment terms for oil-backed loans under the China Venezuela Joint Fund. The agreement removed the minimum quantity of oil that had to be exported (previously 330 thousand barrels per day), and allowed Venezuela’s government to make contributions to the Fund in local currency rather than US dollars. Reports also suggest that the maturity of one of three loan tranches was extended. |
| 2015 | Debt rescheduling only | China Development Bank | In 2015, China Development Bank extended loan maturities under the loan-for-oil deals and allowed Venezuela to make repayments in bolivars. |
| 2016 | Debt rescheduling only | China Development Bank | In 2016, China Development Bank (CDB) rescheduled Government of Venezuela's outstanding debt obligations one more time. According to AidData, the rescheduling covered the entire portfolio of roughly $50 billion in existing loans. CDB granted an additional two-year grace period and lowered minimum oil shipment quantities. The agreement also seems to have introduced state-contingent features that linked repayments to oil price fluctuations. |
| 2018 | Debt rescheduling only | China Development Bank | In 2018, China Development Bank granted an additional grace period extension. There are no details on the change in financial terms and on which loans were treated. |
| 2020 | Debt rescheduling only | China Development Bank | In 2020, China Development Bank extended a new grace period on outstanding debt until the end of 2020. |
Source: Horn, Reinhart & Trebesch, China's overseas lending and debt restructurings Methodology