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S&P says Venezuela has defaulted on its debt

14 November 2017

The government held a meeting with bondholders in Caracas on November 13 about a debt restructuring (generally considered akin to default), which is typically used to determine how much less investors will be paid than officially owed.

Ratings agency Standard & Poor's says Venezuela has defaulted on its debt after it failed to make payments due on some of its bonds.

S&P's verdict came after the Venezuelan government met with worldwide creditors in Caracas but offered no concrete plan for restructuring its $150 billion debt.

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.

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About 70 percent of Venezuelan bondholders are North American, according to government figures.

Previously it had Venezuela in junk bond status.

While placing those latter two ratings on CreditWatch, S&P added that it saw a one-in-two chance Venezuela night default again within the coming three months.

Instead, the head of the Venezuelan commission, Vice-President Tareck El Aissami, read a statement blaming sanctions imposed by the United States for Venezuela's difficulties in making the payments.

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

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

The US has designated vice president El Aissami himself a drug kingpin with whom US entities are barred from dealing.

Maduro is also under fire internationally for marginalizing the opposition, which controls the parliament, and stifling independent media.

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Under the sanctions, no USA citizen can do business with Venezuelan individuals on the list.

S&P says Venezuela has defaulted on its debt