Venezuela defaults on foreign debt repayments

Venezuela in 'selective default': ratings agency

"The start of this refinancing of our debt ratifies our full intention to comply, as we have always done, with all our obligations", it said.

The agency cut the country's long-term foreign currency sovereign credit rating to selective default, or SD, from CC, and downgraded the issue ratings on the bonds to D from CC. Compounding the situation, another eight managers and employees of state oil company PDVSA in eastern Venezuela were arrested in recent days for fiddling production figures, chief prosecutor Tarek Saab told reporters.

The decision from the ratings agency followed the government's failure to make good on coupon payments for debt maturing in 2019 and 2024 within a 30-day grace period.

The agency said it acted after a 30-day grace period had passed on payments on two bonds.

Venezuela is buried under a $150 billion foreign debt mountain, including $28 billion owed to its biggest creditor China and another $8 billion to Russian Federation.

Venezuela hosted a brief meeting with creditors in Caracas on Monday to discuss its total $150 billion foreign debt but the discussions ended without any agreement.

One bondholder, leaving the meeting that lasted a little over half an hour at the "White Palace", departing with a colourful gift-bag containing Venezuelan chocolates and coffee, said: "There was no offer, no terms, no strategy, nothing".

Bondholders had told Reuters on Monday they had not yet received payments on the 2019 and 2024 bonds but remained unconcerned by the delay, which they said was partly due to increased bank vigilance of Venezuelan transactions in the wake of USA sanctions.

The sanctions also impose a ban on U.S. entities buying any new Venezuelan debt issues, complicating the government's debt restructuring plan.

Monday's short and confused meeting, attended by senior Venezuelan officials blacklisted by the United States, gave no clarity on how Mr Maduro would carry out his plan, bondholders and their representatives who participated said afterwards.

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