Standard and Poor’s rating agency declares Venezuela “partially in default” on debt

The agency notes that the country, on the verge of default, is unable to repay $ 200 million.

The rating agency Standard and Poor’s announced Tuesday, November 14, that it declared Venezuela “partially in default” on its debt. The agency is thus the first to declare the country, on the verge of default, in partial default.

How does Standard and Poor’s justify its decision?

The agency says it made its decision the day before, after a grace period of thirty days on the payment of two bonds. She says she found the country’s inability to repay $ 200 million.

Where are the discussions on a possible renegotiation of the debt?

Monday, the meeting in Caracas of international creditors of Venezuela, to try to renegotiate the debt of the country and to avoid him the so much dreaded default of payment, ended without an agreement but with the promise to meet again soon.

The government called the meeting, barely twenty-five minutes, a “resounding success, ” in a statement Monday night.

The creditors came out disappointed with the closed meeting in the White Palace, opposite the Miraflores presidential palace.

“They said they would form technical groups to evaluate proposals for renegotiating debt in the short and medium term. But they gave no concrete details about their plans, what they hope for, ” told Agence France-Presse (AFP) Geronimo Mansutti, broker Rendivalores, referring to the presence at the meeting of 300 investors or their representatives. “The meeting was very bad,” he summed up.

According to several participants, the parties, who have committed to meet again soon, have not set a date.
Read also: Venezuela will declare itself “never” in default, says Maduro.

What are the deadlines for Venezuela?

Venezuela wants to restructure – ie reschedule repayments or even reduce debts, estimated at 150 billion dollars, because it has only 9.7 billion reserves and must repay to less 1.47 billion by the end of the year, then 8 billion in 2018.

This would exacerbate the recession that has reduced GDP by 36% in four years and cut off the country and its state oil group PDVSA from the markets while exposing them to lawsuits and the seizure of assets and subsidiaries abroad.

Meanwhile, in New York, a specialized committee of the ISDA (International Association of Derivatives), consisting of 15 financial companies, had to decide on the follow-up to be given to a delay of payment of 1.16 billion dollars of the Venezuelan public oil group PDVSA.

On Tuesday, the ISDA committee announced that it was giving up a vote in the immediate absence for lack of sufficient information to decide. The committee said it will meet again Thursday in New York at 18 hours GMT “to continue discussions” on the consequences of a delay in payment of PDVSA to its international creditors.
Early Monday evening, the Venezuelan government had still not confirmed the settlement of 81 million dollars expired Friday, or that of another payment of 200 million, scheduled Monday.