Friday, 22 February, 2019

China downplays Venezuela debt risks

China downplays Venezuela debt risks China downplays Venezuela debt risks
Melinda Barton | 14 November, 2017, 19:02

"We also believe the Venezuelan government and people have the ability to handle the debt issue of their country", Geng said.

S&P says Venezuela is also overdue on four other bond payments worth a total of $420m but that the grace period has not yet expired on those payments. S&P lowered two issues' ratings to "D" (default) and said there is a one in two chance that the government.

Yesterday, as nervous, mainly US, creditors met in Caracas to find out what might happen to the US$ Venezuelan sovereign bonds they own, S&P downgraded these to "soon-to-default" status.

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.

On Monday, government officials met with creditors in Caracas in an attempt to restructure its debt.

Beijing and Moscow have emerged as Venezuela's most reliable sources of funding, with China owed $28 billion and Russian Federation $8 billion.

PDVSA, in turn, relies on credit lines from worldwide banks to finance oil production.

The ratings agency said the South American nation had failed to make $200m (£153m) in repayments on its foreign debt.

A committee of 15 financial firms met in NY "to discuss whether a Failure to Pay Credit Event had occurred" with respect to PDVSA, but ended up postponing a decision until Tuesday.

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

Now, as USA sanctions cut deeper into what's left of the economy, it's increasingly unclear how Venezuela will support itself.

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