Ratings Agencies Cave: Venezuela Defaulted, Selectively

Ratings Agencies Cave: Venezuela Defaulted, Selectively

Participants at the meeting told AFP that officials said the government meant to form working groups to evaluate short- and mid-term debt renegotiation proposals, but gave no specifics. 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. President Nicolas Maduro's negotiating committee met with investors in Caracas on Monday but offered no firm proposals on its intention to alleviate crippling foreign debt.

S&P said it had lowered Venezuela's long-term foreign currency rating to "SD", and cut its long- and short-term foreign currency sovereign credit ratings on the Bolivarian Republic of Venezuela to "SD/D" from 'CC/C.

Caracas has less than $10 billion left in hard currency reserves, but must make $1.4 billion in debt payments before year-end, and another $8 billion next year.

Venezuela's state-run oil company PDVSA has also been declared in default by rating agencies Fitch and Moody's. It lasted about 30 minutes, and vice president Tareck El Aissami, Venezuela's debt negotiator, mainly used the meeting as a chance to complain about Donald Trump.

The agency said it acted after a 30-day grace period had passed on payments on two bonds.

Vice-president El Aissami blamed United States sanctions for delays to Venezuela's debt repayments. And many creditors also can't negotiate with El Aissami: He, too, is sanctioned by the US Treasury, which accuses him of drug trafficking.

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

But Maduro remains defiant, insisting on Sunday that his country would "never" default and pointing to ongoing negotiations with China and Russian Federation.

A default can be declared either by the major ratings agencies, big debt-holders or by the government itself.