Venezuela Declared in Default by S&P After Missing Bond Payments

Venezuelan President Nicolas Maduro

Venezuelan President Nicolas Maduro

The US agency's action came after Vice President Tareck El Aissami met with creditors in Caracas Monday but offered no way out of the impasse.

The agency says "there is a one-in-two chance that Venezuela could default again within the next three months".

A negative or inconclusive result could speed the country's descent on a slippery slope towards a default that might see slighted creditors trying to grab assets overseas belonging to Venezuela and its state oil company PDVSA.

President Maduro confused investors this month with a vow to continue paying Venezuela's crippling debt, while also seeking to restructure and refinance it.

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

The International Swaps & Derivatives Association will meet Tuesday to discuss whether a week-long delay on bond payments from the state oil company will trigger default-insurance contracts on those securities.

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.

Analysts Set $10.00 Target Price for Petroleo Brasileiro SA- Petrobras (PBR.A)
IHT Wealth Management LLC acquired a new stake in Petroleo Brasileiro S.A. - Petrobras during the second quarter worth $103,000. Petroleo Brasileiro S.A. - Petrobras ( PBR ) traded down C$0.13 during mid-day trading on Friday, reaching C$10.71.

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

Late Sunday, Maduro struck a defiant tone, insisting in remarks carried on state television that his country would "never" default and pointed to ongoing negotiations with China and Russian Federation.

It has less than United States dollars 10 billion left in hard currency reserves, and yet it must make USD 1.4 billion in debt payments before the end of the year, and another $8 billion next year.

The nation, home to the world's largest oil reserves, owed investors about $200 million and failed to make those payments by the end of a 30-day grace period that expired over the weekend, S&P said in a statement in which it lowered the country's rating to SD.

A default can be declared in several ways: by the major ratings agencies, big debt-holders, or by the government itself.

In announcing its own sanctions on Monday, the European Union said the new measures were aimed at "underscoring its concerns with the situation in the country".

"As the Venezuelan economy continues to crumble, the situation will likely only worsen especially as the country is at risk of defaulting on its debt", the USA delegation said in a document calling the meeting.

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