Standard & Poor's declares Venezuela in partial default

Standard & Poor's declares Venezuela in partial default

In the case of Venezuela, the government of President Nicolás Maduro failed to make $200m in payments on two global bond issues by 12 November, when a 30-day grace period expired.

While placing those latter two ratings on CreditWatch, S&P added that it saw a one-in-two chance Venezuela night default again within the coming three months.

The lowered rating is the latest strike to the oil-rich but cash-strapped country that's under massive financial pressure.

But at its first meeting with creditors Monday in Caracas - a 25 minute, close door session - participants said officials proposed no plan for restructuring the debt.

A drop in oil prices has contributed to a galloping shortage of basic goods in the country with the world's largest proven oil reserves, where inflation is expected to reach 1,000 per cent this year.

Venezuela is buried under a $150 billion foreign debt mountain, including $28 billion owed to its biggest creditor China and another $8 billion to Russian Federation.

Yesterday, as nervous, mainly US, creditors met in Caracas to find out what might happen to the US$ Venezuelan sovereign bonds they own, S&P downgraded these to "soon-to-default" status.

"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.

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

The so-called Determinations Committee for the Americas, comprised of 15 financial firms, met in NY following an initial gathering last Friday, "to discuss whether a Failure to Pay Credit Event had occurred" with respect to PDVSA, according to the ISDA.

Late Sunday, Maduro struck a defiant tone, insisting that his country would "never" default and pointing to ongoing negotiations with China and Russian Federation.

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

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

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

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