How China’s biggest debtors may struggle to pay off their loans

CDB provided a US$4.02 billion loan to Venezuela’s state-owned oil company Petróleos de Venezuela (PDVSA) in 2013. The deal was signed in the hope of doubling daily oil production in the oil-rich country and was supported by PDVSA’s joint venture with the Chinese state-owned company China National Petroleum Corporation (CNPC). This loan was signed under a maturity date of eight years at a rate of Libor (the rate banks use to lend to each other) plus 5 per cent. The loan is only a proportion of the total of US$60 billion the country owes China. More…