Venezuela 'selective default' declared, govt insists it is paying up_Business_Asia Pacific Daily

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Venezuela 'selective default' declared, govt insists it is paying up

Business2017-11-15

Venezuela and the jewel of its crude-dependent economy, state oil company PDVSA, were declared in partial default by ratings agencies Tuesday, but the government insisted it was in the process of paying up. Standard & Poor's declared Venezuela in "selective default" after it failed to make 200 million US dollars in payments on two global bond issues by the end of a 30-day grace period on November 12. Fitch meanwhile placed PDVSA in selective default for a week's delay in the payment of two bonds totaling some 2 billion US dollars, which matured November 2 and October 27. Communications Minister Jorge Rodriguez said Venezuela was already catching up on the payments. "Today, we have begun interest payments on Venezuela's foreign debt and last week, PDVSA made its debt interest payments," he said on state television. "We pay our debts, despite what the ratings agencies, the US Treasury, the European Union or (US President) Donald Trump say." A committee of 15 financial firms meeting in New York meanwhile put off a decision for a third straight day on whether a "Failure to Pay Credit Event" had occurred at PDVSA. They will reconvene Thursday to determine whether holders of PDVSA debt with default insurance – credit default swaps – can collect payment. PDVSA is vulnerable to creditors potentially moving to seize crude shipments or refinery assets abroad, particularly from its US subsidiary Citgo. If a selective default spreads to other bond issues, in particular the nation's 150 billion US dollars sovereign debt, the South American country would likely be declared in full default. (AFP)

Venezuela and the jewel of its crude-dependent economy, state oil company PDVSA, were declared in partial default by ratings agencies Tuesday, but the government insisted it was in the process of paying up.

Standard & Poor's declared Venezuela in "selective default" after it failed to make 200 million US dollars in payments on two global bond issues by the end of a 30-day grace period on November 12.

Fitch meanwhile placed PDVSA in selective default for a week's delay in the payment of two bonds totaling some 2 billion US dollars, which matured November 2 and October 27.

Communications Minister Jorge Rodriguez said Venezuela was already catching up on the payments.

"Today, we have begun interest payments on Venezuela's foreign debt and last week, PDVSA made its debt interest payments," he said on state television.

"We pay our debts, despite what the ratings agencies, the US Treasury, the European Union or (US President) Donald Trump say."

A committee of 15 financial firms meeting in New York meanwhile put off a decision for a third straight day on whether a "Failure to Pay Credit Event" had occurred at PDVSA.

They will reconvene Thursday to determine whether holders of PDVSA debt with default insurance – credit default swaps – can collect payment.

PDVSA is vulnerable to creditors potentially moving to seize crude shipments or refinery assets abroad, particularly from its US subsidiary Citgo.

If a selective default spreads to other bond issues, in particular the nation's 150 billion US dollars sovereign debt, the South American country would likely be declared in full default.

(AFP)

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