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Venezuelan Credit Dashboard: Default Risk Rises Even With Swap 

November 4, 2016

Nathan Crooks, Bloomberg

Venezuela, which has the largest crude reserves on the planet, has defied predictions of default since the oil collapse started in 2014, and analysts are split as to how long the nation of 30 million can hold out. With that in mind, Bloomberg is taking a close look each month at some of the key components that may determine its fate.

After weeks of tense negotiations, state oil company Petroleos de Venezuela said last week that creditors holding $2.8 billion of bonds that come due over the next year agreed to extend maturities. While short of the $5.3 billion that PDVSA had wanted to exchange, it will buy the company some time. After making a capital payment due on Nov. 2 on bonds that mature in 2017, the government and PDVSA will need to make payments totaling $722 million during the rest of the month, according to data compiled by Bloomberg. 

After that, payments are relatively light until next April, when nearly $3 billion comes due.

Next year is likely to be a “year of muddling through, with ad hoc measures including potential for more debt liability,” Siobhan Morden, the head of Latin American fixed-income strategy at Nomura Holdings Inc., said in a note on Nov. 1. “Next year becomes more challenging on whether FX reserves and more import compression continues to postpone a credit event with an increasing dependence upon oil exports as sole financing for USD liabilities.” Read more

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