MAS SOBRE EL DEFAULT TÉCNICO ANUNCIADO POR MADURO

BARRON'S DE HOY

It’s Your Default, Not Mine! Maduro’s Doublespeak in Venezuela

By

Dimitra DeFotis

Nov. 3, 2017 11:05 a.m. ET

There's doublespeak from Venezuela on debt default as the nation scrambles to make a payment.

Bond prices were moving lower on uncertainty.

President Nicolas Maduro said Thursday that the state-run oil producer Petroleos de Venezuela or Pdvsa would make a final $1.1 billion bond payment Friday, but he also issued another order regarding the country's roughly $120 billion in foreign debt, according to the Associated Press: "I decree a refinancing and a restructuring of all external debt and all of Venezuela's payments," Maduro said in a nationally broadcast address Thursday. So officially, there has not been a credit "event" that signals a formal default.

Siobhan Morden, head of Latin America Fixed Income Strategy at Nomura Securities, writes that investors should not rule out an accidental default, though she thinks the government can probably make a past-due Electricidad de Caracas (Elecar) interest payment in a grace period that expires Nov. 9. Morden adds:"... It’s almost like President Maduro is just admitting that they’ve run out of funds without knowing what to do next .The latest comments from President Maduro are almost doublespeak– reaffirming
 payment on the PdVSA’17 (sending funds Friday), while at the same 
time calling for a restructuring of external debt via 
a presidential committee as of Friday. President Maduro
 named Vice President Tareck El Aissami as heading the committee, 
which further complicates the process since the U.S. 
Office of Foreign Assets Control (OFAC)
 has sanctioned Aissami as a narco-trafficker. T