Venezuela

Petroleos de Venezuela SA’s credit grade was cut to one notch above default by Fitch Ratings in the aftermath of President Nicolas Maduro’s announcement that the country intends to restructure its global debt, including that of the state-run oil producer, Bloomberg News reported. Fitch lowered PDVSA’s rating to C from CC, citing last week’s announcement by the Venezuelan government, and a missed payment on the company’s bonds due 2027. The grace period for the $81 million interest payment, which was due last month, expires on Monday.

Venezuela’s credit grade was cut deeper into junk territory by Fitch Ratings and S&P Global Ratings Friday, after President Nicolas Maduro called for a restructuring of the nation’s global debt, Bloomberg News reported. Fitch reduced the nation’s long-term foreign rating to C from CC and called a default "highly probable," according to a statement. S&P downgraded the sovereign and state run-oil company Petroleos de Venezuela to CC from CCC-, two notches from default.

In a related story, Bloomberg News reported that one day after President Nicolas Maduro left traders puzzled by pledging to both refinance and restructure Venezuela’s foreign bonds, his chief debt negotiator only added to the confusion. Tareck El Aissami, the country’s vice president, chose yet another term as he spoke Friday -- “renegotiate” -- to describe the government’s plans while simultaneously saying bond payments would continue to be made.

President Nicolas Maduro said Venezuela will seek to restructure its global debt after the state-owned oil company makes one last payment, blaming U.S. financial sanctions for making it impossible to find new financing, Bloomberg News reported. The government will transfer funds for a $1.1 billion principal payment on Petroleos de Venezuela bonds that came due Thursday, Maduro said from Caracas. From there on out, the nation will renegotiate its debt with banks and investors, he said in a national address.

Venezuela appeared to have made a crucial bond repayment in the nick of time on Wednesday but the chaos surrounding the instalment stirred nervousness that the crisis-ridden country might finally be running out of money ahead of another big debt payment due on Thursday, the Financial Times reported. The Latin American country and its state oil company PDVSA have failed to make several debt payments in recent weeks.

The bond trustee for Venezuela’s state oil company is keeping investors in the dark about the status of a critical payment that was due Oct. 27, Bloomberg News reported. Mitsubishi UFJ Financial Group, the trustee on the notes maturing in 2020, has been telling investors that it won’t provide any information about the status of their funds until it issues a statement as soon as today or tomorrow, according to people with knowledge of the matter, who asked not to be identified because the conversations were private.

Investors are getting mixed signals as Venezuela stares down billions of dollars in debt obligations over the next few weeks, Bloomberg News reported. Although PDVSA said it paid an $842 million principal payment on its 2020 bonds due last Friday, the money has yet to materialize in the accounts of bondholders. Another $1.2 billion payment looms on Thursday. And to top it off, the clock is ticking on more than half a billion dollars in debt from the state oil firm and Nicolas Maduro’s government that are in a 30-day grace period.

Venezuela’s state-run oil company said it transferred the funds to make an $842 million principal payment on its bonds due Friday, overcoming the first of many hurdles the country will face in coming days as it seeks to avoid sinking into default, Bloomberg News reported. The announcement spread a sense of relief to investors in the bond market, who drove up Venezuelan asset prices across the board Friday. A second big payment is due Nov. 2, and the country’s decision to disburse the cash for today’s payment indicates that it likely intends to meet that one too.

Venezuela’s state oil company has a hefty payment due Friday and the lack of any signs or comments about the funds being transferred has the market in a late stage of panic, Bloomberg News reported. PDVSA’s dollar bonds tumbled more than four cents with yields on notes due 2020 jumping more than 2 percentage points to 17.3 percent. The probability of PDVSA defaulting on its debt over the next year has jumped to 79 percent with the odds over the next five years at 99 percent, according to credit default swap trading. Venezuela is already two weeks late on coupons for a slew of other bonds.

The former chief executive officer of Venezuela’s state run-oil company said it will make debt payments this year and next, even as he acknowledged the crude producer is struggling with cash-flow and operational issues, Bloomberg News reported. The company has “all the resources to honor its liabilities,” Rafael Ramirez, who is now Venezuela’s ambassador to the United Nations, said in an interview in New York.