Why Venezuela Bonds Are Back in Play for Investors: QuickTake

Venezuela’s bonds are back on investors’ radar following the seizure of President Nicolas Maduro by US special forces on Jan. 3, with markets increasingly pricing in the possibility of a long-delayed debt restructuring.

Venezuela’s economy has been crippled by corruption, mismanagement and chronic underinvestment. US sanctions compounded the damage by limiting access to overseas financing and restricting oil exports, the government’s main source of revenue.

The hope among investors is that a post-Maduro government will normalize relations with Washington, sanctions will ease and foreign capital will pour back into Venezuela’s oil sector. That would make creditors more willing to strike ...