S&P declares Venezuela in 'selective default'

It is the first time in recent years the Venezuela government has exceeded the buffer period on its bonds.

"The process of refinancing Venezuela's foreign debt began with resounding success", a government statement said late on Monday, amid the impact of USA financial sanctions and unfair assessments by worldwide rating agencies.

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

Bondholders, however, saw things differently.

No solid proposals came out of the meeting but officials said they plan to continue to service obligations.

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.

"Nothing of substance happened", said Raymond Zucaro, chief investment officer at Miami-based RVX Asset Management, who did not attend Monday's meeting.

The latest non-decision comes as Venezuela and PDVSA were declared by ratings agencies to be in "selective default" due to the late payments, and as the government initiated talks with creditors to restructure the country's estimated $150 billion in debt. The agency warned there was a strong chance it would miss further payments within three months.

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

Industry body ISDA said it would reconvene on Tuesday to discuss whether PDVSA had triggered a credit default event through a late payment of its 2017N bonds.

S&P cut its long-term foreign currency issuer debt rating from CC to "selective default", keeping that on its short and long-term local currency debt at C and CCC-, respectively, albeit on Credit Watch negative.

Oil-dependent Venezuela's crude output dipped last month below 2 million barrels per day, its lowest level in almost three decades, global producer group Opec said on Monday.

Vanessa Coleman

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