Published: Tue, November 14, 2017
Worldwide | By Gretchen Simon

Venezuela in 'selective default': S&P

Venezuela in 'selective default': S&P

Worldwide credit ratings agency Standard & Poor's has declared Venezuela to be in "selective default". His appointment as negotiator by president Nicolas Maduro was perhaps an attempt to blame the USA for the default and boost local popularity, according to Ray Zucaro of RVX Asset Management, which invests in Venezuelan debt, on Bloomberg Television.

Besides the two bond payments it has defaulted on, Venezuela is overdue on four other debt payments but they were still within the 30 day grace period, S&P said.

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.

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.

"We have lowered two issue ratings to "D" (default), and we lowered the long-term foreign currency sovereign credit rating to "SD" (selective default)", the agency said.

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China said Tuesday that cooperation with Venezuela on its massive loans was "proceeding smoothly", voicing confidence that Caracas can handle its debt problems even as the South American country descended towards selective default.

Venezuela's total external debt, which also includes loans from countries like Russian Federation and China, is thought to be as much as $140bn.

The US has designated vice president El Aissami himself a drug kingpin with whom US entities are barred from dealing. Nevertheless, his options are very limited.

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

Permanent council members Russian Federation and China boycotted the meeting, as did non-permanent members Bolivia and Egypt.

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