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S&P Downgrades Venezuela To “Selective Default” After Bondholder Meeting Devolves Into Total Chaos

S&P Downgrades Venezuela To “Selective Default” After Bondholder Meeting Devolves Into Total Chaos

Creditors had little expectations from today’s ad hoc meeting with “soon-to-default” Venezuela, and with good reason: not only was the meeting attended by several sanctioned Venezuelan officials, potentially jeopardizing the legal status of any bondholders who voluntarily appeared at the Caracas meeting meant to “restructure and refinance” Venezuela’s massive debt load, but it was nothing but total confusion, with neither Venezuela, nor creditors knowing what is on the agenda, why they were meeting, or what is the endgame. In sum, the meeting resulted in no firm proposals, lasted no more than 30 minutes, consisted largely of an angry rant by an alleged drug dealer who also happens to be Venezuela’s vice president, and ended as chaotically as it started.

Quoted by Reuters, one unnamed bondholder had a perfectly succinct summary of what happened today, or rather didn’t:

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

Credit walked in as confused as they left, a little over a week after President Nicolas Maduro stunned investors with a vow to continue paying Venezuela’s crippling debt, while also seeking to restructure and refinance it; the two things are literally impossible at the same time. There is another problem: both a restructuring and a refinancing appears out of the question, due to U.S. sanctions against the crisis-stricken nation, which make discussions with the key negotiators who has been put on a sanctions black list, grounds for potential arrest. A default would compound Venezuela’s already disastrous economic crisis.

…click on the above link to read the rest of the article…

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