• 2 minutes Oil Price Could Fall To $30 If Global Deal Not Extended
  • 5 minutes Middle East on brink: Oil tankers attacked off Oman
  • 8 minutes CNN:America's oil boom will break more records this year. OPEC is stuck in retreat
  • 35 mins Emissions Need To Be Halved To Avoid 3C Warming
  • 38 mins Iran downs US drone. No military response . . Just Destroy their Economy Completely. Can Senator Kerry be tried for aiding enemy ?
  • 12 hours The Pope: "Climate change ... doomsday predictions can no longer be met with irony or disdain."
  • 11 mins Here We Go: New York Lawmakers Pass Aggressive Law To Fight Climate Change
  • 4 hours Coal Boom in Asia is Real and a Long Trend
  • 21 hours Hormuz and surrounding waters: Energy Threats to the World: Oil, LNG, shipping markets digest new risks after Strait of Hormuz attack
  • 1 hour Pioneer CEO Said U.S. Oil Production would be up to 15 mm bbls/day NOW if we had the pipelines. Permian pipelines STARTING Q3
  • 10 hours Solar Panels at 26 cents per watt
  • 3 hours Huge UK Gas Discovery
  • 20 hours Trudeau approves Trans Mountain Pipeline
  • 22 hours OPEC, GEO-POLITICS & OIL SUPPLY & PRICES
  • 22 hours The Plastics Problem
  • 15 hours US to become net oil exporter in November: EIA
  • 12 hours US Shale Drilling lacks regulatory body.
Alt Text

Russia Calls The Shots In A Fractured OPEC

Russia and most OPEC members…

Alt Text

The Bearish Threat Within OPEC

Following a dramatic collapse in…

ZeroHedge

ZeroHedge

The leading economics blog online covering financial issues, geopolitics and trading.

More Info

Trending Discussions

Venezuela Avoids Default With Critical Payment

On Wednesday, when looking at the imminent principal payment on $842 million in debt issued by Venezuela's state-run oil company PDVSA , we warned that the state - which had previously activated a 30-day grace period on over $586 million in interest payment due over the past month - may be bankrupt shortly for one specific reason: unlike the rest of the country's debt, the PDVSA bonds have no grace period in the bond indenture for an event of default. It is also why some suggested that Venezuela was shoring up dollars by not repaying other debt, to have funds available for this particular issue.

In retrospect, that appears to be the case because on Friday, PDVSA said that unlike the various other "technical glitches" that had accompanied Venezuela's previous interest payment, it has transferred funds to make a principal payment on debt due Friday amid jitters among investors that the energy producer could default as soon as today."

According to Bloomberg, the Caracas-based firm said it paid $842 million on bonds that fully mature in 2020. The statement didn’t mention the $108 million interest payment that was also due Friday, but has a 30-day grace period. Petroleos de Venezuela SA owes an additional $1.2 billion by Nov. 2 for notes that mature that day.

That said, we still have to get confirmation from the transfer agent that payment was indeed made, and didn't get lost in yet another "technical glitch."

Some generic big picture observations from Bloomberg:

A default for PDVSA would have been disastrous at a time when access to credit has already been severely curtailed, refineries are running at less than half of their capacity and oil output has tanked to less than 2 million barrels a day. Venezuelan President Nicolas Maduro has insisted that his government will continue to honor its international obligations even as imports shrivel to save cash for debt payments causing shortages of goods to worsen in a nation already suffering a deep recession and hyperinflation. Related: Kurdistan Proposes Immediate Ceasefire With Iraq

Well, that's one down... and many more to go. As the tables below show, Venezuela is entering a phase where it has a lot of interest payments and a lot of principal maturities.

Grace Period expirations:

(Click to enlarge)

Maturity Schedule

(Click to enlarge)

Debt summary breakdown

(Click to enlarge)

As such, it is not a question of if, but when the financially sanctioned state - which is finding that obtaining dollars is becoming more and more difficult - will default.

By Zerohedge

 

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment
  • Citizen Oil on October 29 2017 said:
    It's like a private person paying off the interest of a credit card with another card. Only a matter of time. Their only hope is oil gets up to a reasonable bid and I doubt that'll happen fast enough. The scary thing is when you realize just how many countries have sanctions on them and how many more should have sanctions. Humans behaving badly.

Leave a comment





Oilprice - The No. 1 Source for Oil & Energy News