Venezuela begins refinancing its foreign debt

Andrew Cummings
November 14, 2017

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.

President Nicolas Maduro's government had summoned creditors to Caracas for talks on Monday about restructuring Venezuela's $60 billion in outstanding bonds, but failed to present a concrete proposal.

Venezuela hosted a brief meeting with creditors in Caracas on Monday to discuss its total $150 billion foreign debt but the discussions ended without any agreement.

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 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.


Separately, the Luxembourg Stock Exchange said it was halting trading of Venezuela's 2019 and 2024 bonds due to an "event of default".

Mr Aissami, who has been accused of drug trafficking by the United States, is himself on the list of Venezuelan individuals sanctioned by the USA treasury department.

There's still hope for restructuring with only some issues in peril.

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


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.

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.

But his options are very limited.

"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.


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