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S&P downgrades Venezuela, citing missed coupon payments on 2019, 2024 bonds
By Rebecca Melvin
New York, Nov. 14 – Citing Venezuela’s $200 million in missed coupon payments for its 7¾% bonds due 2019 and 8¼% bonds due 2024, S&P Global Ratings lowered its long- and short-term foreign currency sovereign credit ratings on the Bolivarian Republic of Venezuela to SD/D from CC/C.
The long- and short-term local currency sovereign credit ratings remain at CCC-/C and are still on CreditWatch with negative implications, the ratings agency said in a news release late Monday.
“At the same time, we lowered our issue ratings on Venezuela’s global bonds due 2019 and 2024 to D from CC,” the ratings agency said.
S&P’s issue ratings on the remainder of Venezuela’s foreign currency senior unsecured debt remains at CC, and affirmed its transfer and convertibility assessment on the sovereign at CC.
“Our CreditWatch negative reflects our opinion that there is a one-in-two chance that Venezuela could default again within the next three months. We could lower specific issue ratings to default (D) if Venezuela doesn't make its overdue coupon payments before the stated grace period expires, or upon the execution of the announced debt restructuring,” the ratings agency said.
If the sovereign cures its default on the overdue coupon payments and remains timely on other coupon payments before the restructuring debt operation is completed, S&P said it would raise its long-term foreign currency sovereign issuer credit and issue ratings to CC.
If any potential restructuring operation is completed, S&P said it would lower all of its foreign currency ratings on Venezuela to default and subsequently raise them to the CCC or B category.
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