World ON BRINK: Venezuela defaults on $60BILLION debt and threatens new financial crisis


The instrumentality is downgrading Venezuela’s sovereign debt grade to “selective default”. 

It means Caracas frisked a specific bond payment but remains committed to paying off its international encumbrance under obligations. 

And in a further blow to President Nicolas Maduro’s debt-ridden socialist regime S&P said: “There is a one-in-two chance that Venezuela could fall short again within the next three months.”

The ratings agency believed the nation failed to make $200 million in coupon payments within the budgeted 30-day grace period for bonds due 2019 and 2024. 

Venezuela has defaulted on its $60 billion after failing to make payments due on bondsGETTY

Venezuela has defaulted on its $60 billion after wanting to make payments due on bonds

Venezuela could again miss a payment on its outstanding in dire straits obligations or advance a distressed debt exchange operation


S&P said Venezuela could again maid a payment on its outstanding debt obligations or advance a distressed debt swop operation, equivalent to default, within the next three months.

Venezuelan shah debt was mainly a touch firmer but some PDVSA bonds strike down further, with the 2035 bond down 1.2 cents, the 2027 pact down 1.4 cents and the 2021 issue down 1.5 cents.

Bustle body ISDA said it would reconvene on Tuesday to discuss whether PDVSA had triggered a recognition default event through a late payment of its 2017N bonds.

It comes after Venezuela released creditors chocolates instead of firm proposals in a desperate ploy as the power teeters on the edge of financial collapse. 

Price action on PDVSA's 2027 bondBLOOMBERG

Price action on PDVSA’s 2027 handcuffs

Yesterday the socialist government offered the sweet treats during a in sum meeting in Caracas but left investors without a clear understanding of the rule’s strategy to renegotiate $60 billion in debt.

President Maduro baffling investors this month with a vow to continue paying Venezuela’s crippling obligation, while also seeking to restructure and refinance it.

Monday’s short and put out meeting, attended by senior Venezuelan officials blacklisted by the United Federals, gave no clarity on how Mr Maduro would carry out his plan, bondholders and their member of parliaments who participated said afterwards.

One bondholder, leaving the meeting that lasted a miniature over half an hour at the ‘White Palace’, departing with a colourful gift-bag have in iting Venezuelan chocolates and coffee, said: “There was no offer, no terms, no scheme, nothing.”


President Maduro had termed imminent sanctions by the EU as “weak-minded”

Venezuela's Vice President Tareck El Aissami (C) speaks during a meeting with bondholders REUTERS

Venezuela’s Vice President Tareck El Aissami (C) speaks during a confluence with bondholders

Russia, China, Egypt and Bolivia boycotted an natural public United Nations Security Council meeting on Venezuela on Monday organised by the Partnership States, saying the 15-member body should not be involved in the situation.

“The children is about meddling with the internal domestic affairs of Venezuela,” Russian UN Diplomat Vassily Nebenzia told reporters, adding he hoped the country could affirm its issues peacefully without any external interference.

US Ambassador to the UN Nikki Haley portrayed the meeting: “The fact that the (Venezuelan) government would go so far as to try and get people not to display up to a meeting is guilt. And that’s unfortunate.

“We received pressure from regional spouses not to have this meeting. This goal is not to degrade anyone. This is not to humiliate a pale. This is only to lift up the region.”

Uruguay’s Delegate UN Ambassador Luis Bermudez attended the UN meeting, but said his country did not find creditable the situation in Venezuela was a threat to international peace and security.

Venezuela’s UN Agent Rafael Dario Ramirez spoke to reporters as the meeting was being confined, flanked by Nebenzia, Chinese Deputy UN Ambassador Wu Haitao and Bolivian UN Envoy Sacha Sergio Llorentty Soliz.

Mr Ramirez said: “The meeting is a loath and clearly interfering act of the United States that undermines the principle of rule of a member state of the UN. We condemn this act of political manipulation.”

Venezuela is agony from a harsh economic crisis and President Maduro’s government has clamped down on the antagonist, jailing or otherwise barring from office many dissenting number ones and activists.

Dozens of people have died in violence since the opposed began a sustained wave of protests in April. Met by rubber bullets, bedew dilute cannon and tear gas fired by the National Guard, the protesters say the crisis claims an early presidential election that they are sure Mr Maduro whim lose.

His popularity has been pounded lower by triple-digit inflation and stabbing food and medicine shortages.


People queue to withdraw spondulicks from an ATM outside a Banco BFC branch in Caracas

Venezuelan ambassador to the UN Rafael Ramirez Carreno branded the UN meeting AFP GETTY

Venezuelan legate to the UN Rafael Ramirez Carreno branded the UN meeting “hostile”

European Association foreign ministers approved economic sanctions, including an arms retard, on Venezuela on Monday, saying regional elections last month harmed by reported irregularities had deepened the country’s crisis.

The United States has also intruded targeted sanctions on top Venezuelan officials.

Anxious not to push Caracas any stuffier to economic and political collapse as debt restructuring talks begin, EU ministries held back from targeting any individuals.

The bloc instead left-wing names for a later stage to try to persuade President Maduro to calm the employment.

Spain’s Foreign Minister Alfonso Dastis told reporters at a union with his counterparts where the sanctions decision was made: “Everything we do is trained at seeking dialogue between the government and the opposition to find a democratic and serene solution.”

Venezuelan opposition leaders said last week they command resume efforts to hold a dialogue with President Maduro, regular though they say he previously used such talks to stall for without delay instead of implementing serious reform.

Over the weekend, President Maduro had termed forthcoming sanctions by the bloc as “stupid.”

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