Venezuela in selective default, says credit ratings agency

Share

The Venezuelan government said Monday that the country has successfully begun the process of refinancing its foreign debt during a meeting earlier in the day in Caracas with bondholders from various countries.

But Venezuela's unpaid obligations total $420 million, and four additional coupon payments are overdue but within their grace periods.

Venezuela's debt crunch comes as no surprise, as the government cuts back on imports to service its debt, leaving the population struggling with shortages of food and medicine.

Venezuela has been in a recession since Maduro succeeded the late president Hugo Chavez in 2013.

"They didn't give any concrete details on their plans, on what they hope to get", Geronimo Mansutti, from the Rendivalores brokerage, told AFP.

The agency said on Tuesday it didn't have high expectations for the country, assessing the chances of Venezuela defaulting again within a three-month grace period at 50 per cent, which would result in a "default" rating.

J&K: One terrorist killed by security forces in Kulgam encounter
The services remained suspended since Monday evening in Kupawra and Baramulla for security reasons. Kashmir, the Himalayan region divided between India and Pakistan, is claimed by both in full.

"We rate this meeting, in which Venezuelan debt holders from Venezuela, the United States, Panama, the United Kingdom, Portugal, Colombia, Chile, Argentina, Japan and Germany participated, as highly positive and very auspicious", the statement continued. And many creditors also can't negotiate with El Aissami: He, too, is sanctioned by the US Treasury, which accuses him of drug trafficking.

The Maduro government had said it would make a $1.2-billion payment on a PDVSA bond on November 2, but it was unclear if the funds ever reached creditors.

Tightening the squeeze on Maduro was the European Union's announcement of sanctions, including an embargo on arms and equipment that could be used for political repression.

As rough as the ride has been regarding debt, Maduro is also being buffeted by worldwide accusations that he is acting as an autocrat - stomping on democracy by marginalising the opposition, which controls the parliament, and stifling independent media.

"The positive climate in which this refinancing process began indicates that we will move forward and continue to build the welfare state that the people of Venezuela deserve", the official note added.

Permanent council members Russian Federation and China boycotted the meeting, as did non-permanent members Bolivia and Egypt.

Share