Ratings Agencies Cave: Venezuela Defaulted, Selectively

Lloyd Doyle
November 14, 2017

The country agreed on terms with Russian Federation for restructuring about $3 billion debt, but it still owes more than $50 billion on bonds held by other creditors.

Venezuela's government said its plan to refinance some $60 billion in bonds was successfully underway, while a rating agency declared the nation in selective default over missed coupon payments.

The Venezuelan government described the creditors' meeting as "a resounding success" and said that it would continue to service its debts.

S&P says Venezuela is also overdue on four other bond payments worth a total of $420m but that the grace period has not yet expired on those payments.

President Nicolas Maduro has formed a commission to restructure Venezuela's sovereign debt and that of state oil company PDVSA.

Separately, the Luxembourg Stock Exchange said it was halting trading of Venezuela's 2019 and 2024 bonds due to an "event of default". And many creditors also can't negotiate with El Aissami: He, too, is sanctioned by the US Treasury, which accuses him of drug trafficking.


American investors can't participate in a restructuring anway, as sanctions prohibit them from receiving new bonds that Venezuela would issue.

PDVSA, in turn, relies on credit lines from worldwide banks to finance oil production.

A default can be declared either by the major ratings agencies, big debt-holders or by the government itself.

The US called an informal meeting of the UN Security Council, where US Ambassador Nikki Haley slammed Venezuela as an "increasingly violent narco-state" that poses a threat to world security.

Venezuela's envoy to the UN, Rafael Ramirez, called the meeting "illegal" and a "hostile" act "of interference" by the US.

Other reports by Iphone Fresh

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