Venezuela

In a related story, Bloomberg News reported that Venezuela is set to pump the least oil in almost three decades, just when it needs petrodollars the most. Output is expected to slump to 1.84 million barrels a day next year, the lowest compared with official government data since 1989, according to a survey with four analysts compiled by Bloomberg. Rig counts hit a 14-year low in October, as drilling companies including Schlumberger Ltd. reduce their exposure in the nation due to unpaid bills. Owner of crude reserves larger than Saudi Arabia’s, Venezuela is teetering on the brink of default.

Venezuela is stumbling closer to a full-blown, formal default on its debts, with bondholders reporting that they had yet to receive the full bond payment that was due last Friday and a finance industry body now about to decide whether default insurance should be paid out, the Financial Times reported. Venezuelan president Nicolás Maduro last week announced that the country would have to restructure its foreign debt pile, but promised to make one last $1.1bn payment on a bond issued by PDVSA, the state oil company.

In a related story, Bloomberg News reported that Venezuela and Russia have agreed on terms for restructuring about $3 billion of the Latin American country’s debt and the deal will come soon, Finance Minister Anton Siluanov said in Moscow. “The Venezuelans have confirmed the terms we’d agreed on, and that’s why the process will move into the concluding phase,” Siluanov told reporters on Wednesday. Russia had offered to reschedule debt payments over two stages, with payments on most of the state loan to be delayed to the second phase, Siluanov said late last month.

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.