Saturday September 3, 2016
The U.S. government is placing pressure on major banks to keep their distance from "illicit" Venezuelan financial flows, specifically identifying Petroleos de Venezuela as a problem area.
This has resulted in Citibank announcing that it will stop processing debt payments to Petroleos de Venezuela's bondholders. The bank has cited "a periodic risk-management review."
The bank told bondholders that it would end its role as Petroleos de Venezuela's principal pay agent and suspend its processing of at least seven debt bonds, including $5 billion in debt payments due in October and November of this year.
If Petroleos de Venezuela can not find another major bank processor, the state oil firm will not be able to make its payments and all hell could break lose.