Sun, Nov 05, 2017 - Page 5 News List

Venezuela calls for creditor meeting amid default fears


Venezuela on Friday called foreign creditors to a Nov. 13 meeting in Caracas aiming to restructure its estimated US$150 billion debt, as credit rating agencies dealt the crisis-stricken country another blow with double downgrades.

Standard & Poor’s cut the nation’s long-term foreign currency rating from “CCC-” to “CC” over growing concerns of the risk of a debt default in the oil-producing country, while fellow agency Fitch Ratings cut the long-term debt rating from “CC” to “C.”

The increasingly dire warnings followed Venezuelan President Nicolas Maduro’s calls to “investors across the whole world and to holders of Venezuelan debt” to attend a Caracas meeting on Nov. 13 “to start a process to refinance and renegotiate the external debt.”

Venezuelan Vice President Tareck El Aissami, who is leading a commission tasked with the restructuring, said the government is seeking “sovereign commitments” for a debt renegotiation.

Flanked by the ministers of economy, finance and energy, El Aissami confirmed that the country had on Friday started to pay out US$1.2 billion due to service the debt of state oil company Petroleos de Venezuela (PDVSA).

El Aissami, one of the Venezuelan officials sanctioned by the US due to alleged ties to drug trafficking, said the talks with creditors would “establish the groundwork to renegotiate the terms of the foreign debt of the republic and of PDVSA.”

“We will begin a sovereign renegotiation of our debt and we will continue to comply fully, transparently, as our government has done historically,” he said in a televised statement.

He said that since 2014 Venezuela, which has the largest proven crude oil reserves in the world, has paid nearly US$72 billion in principal and interest payments on the debt.

Maduro has repeatedly blamed the US for the country’s woes, saying that Washington is trying to strangle Venezuela with sanctions.

US sanctions imposed on Venezuela in August ban US trade in any new bonds issued by the Venezuelan government or PDVSA — a needed step in any restructuring.

A default could see investors try to lay claim to PDVSA assets, including tankers, oil in shipment and subsidiaries, such as the Citgo refiner and service station network in the US.

“The government has mortgaged the future of Venezuelans in an irresponsible way,” said Stalin Gonzalez, head of a grouping of opposition lawmakers who dominate the Venezuelan National Assembly.

The IMF on Friday sanctioned Venezuela for not providing economic data as required of all its 189 member states.

The move carries no financial penalty, but is another sign of Venezuela’s strained relations with the fund.

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