Venezuela in new defaults on two bonds

Crisis-wracked Venezuela has defaulted on two bonds, failing to make a $183 million coupon payment, ratings agency S&P said Friday.

The agency said OPEC-member Caracas failed to make the payment within a 30-day grace period on global bonds due in 2023 and 2028.
The grace period expired Friday.

"In line with our criteria for timeliness of payments, we are lowering the issue ratings on these bonds to "D" from "CC," the agency said.

Falling oil prices and corruption have decimated the economy under socialist President Nicolas Maduro, leading to hyperinflation and chronic food and medicine shortages in the oil-rich but cash-poor South American nation.

Maduro is under fire internationally for marginalizing the opposition and stifling independent media. Earlier this year, 125 people were killed in several months of violent protests against his rule.

Despite this, Maduro is set for the latest in a sweep of poll victories in mayoral elections on Sunday, with the main opposition parties boycotting the polls and showing little sign they can prevent his re-election next year.

Next year's presidential election is scheduled for December, but some experts believe it could be brought forward to March.

Global ratings agencies already had declared Venezuela and state-owned oil company PDVSA to be in "selective default" due to late payments on multiple bond issues.

PDVSA is Venezuela's primary source of income.

Key bosses at the oil company have been sacked and arrested on corruption charges in what analysts see as a purge by Maduro to consolidate power ahead of next year's elections.

Newly-installed oil minister Manuel Quevedo, a former general, told reporters recently that oil production at PDVSA had been sabotaged as a preamble to a coup attempt.

Although it sits atop the world's biggest oil reserves, Venezuela is struggling under an estimated debt burden of $150 billion.

S&P on Thursday said the worsening financial and social crisis in the country had put the credit of Venezuela's US-based oil company Citgo at risk.

The ratings agency put the ratings of Citgo Holdings and Citgo Petroleum on "CreditWatch with developing implications" -- indicating a credit move is likely within 90 days.

Source:AFP