S&P Global Ratings downgraded Venezuela’s foreign currency sovereign credit rating late Monday beyond junk to “selective default” after it failed to make two payments within a grace period.

There’s still hope for restructuring with only some issues in peril. But Venezuela’s unpaid obligations total $420 million, and four additional coupon payments are overdue but within their grace periods. S&P lowered two issues’ ratings to “D” (default) and said there is a one in two chance that the government could “default again” over the next three months. On Monday, bondholders met in Caracas at the invitation of President Nicolas Maduro to discuss restructuring debt issued by the the government and state-owned oil company Petróleos de Venezuela.

Also late Monday, Fitch Ratings downgraded long-term foreign and local currency ratings on state-owned oil company Petroleos de Venezuela (PDVSA) to restricted default, and said bondholders’ recovery of their investment may be at the low end of the anticipated 31% to 50% range.

Source: Ratings Agencies Cave: Venezuela Defaulted, Selectively – Barron’s



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