Venezuela’s debt crisis passed a new milestone as the government missed a principal payment on one of its bonds for the first time this week, boosting arrears on international securities to US$6.1 billion.
It was hardly a surprise for investors, who have watched the value of their securities plummet since President Nicolas Maduro announced in November that he would seek to restructure the country’s debt in the midst of an economic crisis. But it reinforced the difficult position creditors find themselves in as the overdue payments pile up with no resolution in sight and no easy recourse for getting their money back.
Maduro’s recent measures to reduce long-standing gasoline subsidies and redenominate the currency by lopping off five zeroes, both set to take effect this month, are steps in the right direction but ultimately unlikely to help the country pay back bondholders, said Siobhan Morden, who heads Nomura Securities International’s Latin America fixed-income strategy.
“It still looks like a countdown with economic crisis morphing into political crisis for the Maduro administration,” Morden said in an Aug 15 note.
Here’s the latest breakdown of the securities in flux:(*Within grace period)
--With assistance from Katia Porzecanski and Ben Bartenstein