The Daily Journal — The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License 5Y on Monday, authorizing certain transactions related to the 8.5% PDVSA 2020 bond, effective September 17, 2026.
The new license replaces General License 5X, which OFAC issued on June 18, 2026, and which had set August 4 as the effective date. The updated measure postpones the authorization by 44 days.
General License 5Y authorizes “all transactions related to, the provision of financing for, and other dealings in the PDVSA 2020 8.5% bond” that Executive Order 13835 would otherwise prohibit. However, the measure does not lift sanctions against PDVSA or broadly ease the existing sanctions regime.
The most significant provision keeps in place the prohibition on selling or transferring shares of CITGO Holding—PDVSA’s U.S. subsidiary that serves as collateral for the bond—unless the parties first obtain a specific license from OFAC.
OFAC also clarified that no general authorization exists between October 24, 2019, and September 17, 2026, allowing bondholders to enforce or transfer those shares.
In addition to the new license, OFAC released an updated version of Frequently Asked Question (FAQ) 595, reflecting the changes introduced by General License 5Y and reaffirming that the restrictions remain in effect throughout that period.
The agency also stated that if the parties reach a restructuring or refinancing agreement covering outstanding payments to bondholders, they may need additional licenses. At the same time, OFAC said it supports such agreements and encouraged interested parties to apply for specific licenses.
PDVSA issued the 8.5% PDVSA 2020 bond in 2016 through a debt exchange, securing it with 50.1% of the shares of CITGO Holding. Since 2019, the United States has repeatedly extended the effective date of the original authorization under General License 5.
The measure forms part of Washington’s strategy to retain control over Venezuelan assets abroad while negotiations continue over the country’s sovereign debt, which exceeds $20 billion.
