CARACAS, Venezuela — Goldman Sachs Group Inc. bought about $2.8 billion in Venezuelan bonds that had been held by the oil-rich country’s central bank, a lifeline to President Nicolás Maduro’s embattled government as it scrambles to raise funds in the midst of widening civil unrest.
The New York-based bank’s asset management division last week paid 31 cents on the dollar, or about $865 million, for bonds issued by state oil company Petróleos de Venezuela SA in 2014, which mature in 2022, according to five people familiar with the transaction. The price represents a 31% discount on the trading Venezuelan securities maturing the same year.
The investment comes as Maduro’s detractors lobby hard to block Western financial institutions from funneling money to the cash-strapped government, which has been accused by the U.S. and other countries of widespread rights abuses.
The people familiar said the deal is part of the asset manager’s steady increase in Venezuelan holdings. They said Goldman GS-1.96% is betting that a change in government could more than double the value of the debt, which trades at deeply discounted rates with yields around 30% due to chronic default fears.