Venezuela: Is a default imminent?
Venezuela's Maduro at risk of arrest if he leaves the country?
"Blood Profits" author Vanessa Neumann on President Trump canceling his trip to South America and Nicolas Maduro's future as president of Venezuela.
At risk for a default on Tuesday, according to Bloomberg, are notes from the state-run electric utility. These notes were always considered among the country's riskiest, but they don't contain any cross-default rules that would affect sovereign debt or notes from the state oil company. Further, if a default occurs, the utility doesn't have any overseas assets that could be seized.
If the bond does get paid, investors who bought the notes now would make a quick 150% profit. Fitch has the notes rated one notch above default.
The collapse of the country's socialist economy comes after decades of mismanagement, and the situation for the nation deteriorated further during the last oil bear market. Now, in an unfortunate twist as oil prices rally, the country's economy has collapsed to the point where production of its precious resource has plunged.