{"id":27268,"date":"2017-10-26T06:14:33","date_gmt":"2017-10-26T11:14:33","guid":{"rendered":"http:\/\/olduvai.ca\/?p=27268"},"modified":"2017-10-26T06:14:33","modified_gmt":"2017-10-26T11:14:33","slug":"the-time-has-come-venezuela-may-be-in-default-in-under-48-hours","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=27268","title":{"rendered":"The Time Has Come: Venezuela May Be In Default In Under 48 Hours"},"content":{"rendered":"

The Time Has Come: Venezuela May Be In Default In Under 48 Hours<\/a>\u00a0<\/span><\/h3>\n
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This past weekend, Venezuela failed to make $237 million in bond coupon payment, blaming “technical glitches” when in reality it simply did not have the money (or wish to part with it). Adding the $349 million in unpaid bond interest accumulated over the past month as of last Friday, that brings Caracas’ unpaid bills to $586 million this month, just days before the nation must make a critical principal payment. And, as BofA sovereign debt analyst Jane Brauer writes, while the bank’s base case assumption is that Venezuela will make <\/em>its debt service payments this year, “the probability of a short term default has increased substantially with coupon delays<\/strong>” and it could come as soon as this Friday, when an $842 million PDVSA principal plus interest payment is due, <\/strong>and which unlike typical bond payments does not have a 30 day grace period but instead is followed by a second $1.1 billion PDVSA coupon on Nov 2, also without a 30 day grace period.<\/strong><\/p>\n

As Brauer writes, Venezuela has been in as similar situation of payment uncertainty in the recent past, with bond prices plummeting right before a big payment. For example, just before a big principal payment was due in April 2017 Venezuela received a $1bn loan from Russia just one week before the due date. At that time Ven 27s dropped 16% in a month (from $52 to $45) and recovered completely within a month.\u00a0 Ven 27 has fallen to $35, as Venezuela has demonstrated that it will be a challenge to make all payments on time.\u00a0 The difference between now and April is that coupon payment delays then came after, not before the payment.<\/em><\/p>\n

Meanwhile, Venezuela has managed to redefine the concept of payment “on time” which now means “by the end of the grace period”<\/strong><\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

The Time Has Come: Venezuela May Be In Default In Under 48 Hours\u00a0 This past weekend, Venezuela failed to make $237 million in bond coupon payment, blaming “technical glitches” when in reality it simply did not have the money (or wish to part with it). Adding the $349 million in unpaid bond interest accumulated over […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1361,88,2492,195,200,851,4318],"class_list":["post-27268","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bankruptcy","tag-bonds","tag-caracas","tag-debt","tag-default","tag-venezuela","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27268","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27268"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27268\/revisions"}],"predecessor-version":[{"id":27269,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/27268\/revisions\/27269"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}