With two critical debt repayment deadlines rapidly approaching, analysts are sounding the alarm that Venezuela may soon be in default.
PDVSA, the distressed socialist country’s state oil firm, must repay $842 million on a four-year bond on Friday and $1.12 billion on Nov. 2, according to the Financial Times. Neither payment has a grace period, meaning that nonpayment could trigger a default, and investors could demand Venezuela immediately pay back all of its debt.
While bondholders might not want a default, holders of credit-default swaps would likely request that the International Swaps and Deriviates Assocation declare a default so that they can receive payments on their contracts, Bloomberg reported.
Venezuela raised default concerns by missing large payments that were due over the weekend, totalling $237 million on two bonds, according to CNBC.
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