Venezuela begins refinancing its foreign debt

Cornelia Mascio
Novembre 14, 2017

Besides the two bond payments it has defaulted on, Venezuela is overdue on four other debt payments but they were still within the 30 day grace period, S&P said.

S&P Global Ratings downgraded Venezuela's foreign currency sovereign credit rating late Monday beyond junk to "selective default" after it failed to make two payments within a grace period.

Caracas added that it has "punctually" paid $73.35 billion for debt services in the last 36 months, and hoped that the Monday's meeting will help reiterate its willingness to comply with its commitments.

Global credit ratings agency Standard & Poor's has declared Venezuela to be in "selective default".

Bondholders had told Reuters on Monday they had not yet received payments on the 2019 and 2024 bonds but remained unconcerned by the delay, which they said was partly due to increased bank vigilance of Venezuelan transactions in the wake of US sanctions. And many creditors also can't negotiate with El Aissami: He, too, is sanctioned by the US Treasury, which accuses him of drug trafficking.

"We would very likely consider any Venezuelan restructuring to be a distressed debt exchange and equivalent to default given the highly constrained external liquidity", S&P said.

A committee of the International Swaps and Derivatives Association (ISDA) is weighing whether holders of PDVSA debt with default insurance - credit default swaps - can collect payment.

Maduro is also under fire internationally for marginalizing the opposition, which controls the parliament, and stifling independent media.

Now, as United States sanctions cut deeper into what's left of the economy, it's increasingly unclear how Venezuela will support itself.

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