The international rating agency S&P Global Ratings has downgraded Venezuela to SD level, which means the country is declared in selective default since payments on state and PDVSA bonds have been missed.
The state’s total debt due amounts to $300 million, approximately. However, the payment has been already delayed for 30 days. Earlier, Venezuela repeatedly asked for delays but has never failed to make a payment, finding money in time.
If a quarter of bondholders support a decision to demand a full debt payment, they may declare sovereign default. However, some experts think this is a disputable legal procedure that can give rise to much trouble due to the diverse composition of bonds. Also, some difficulties may be caused by the fact that the total debt is very big, estimated to amount to 100-150 billion USD, while the state currency reserves hardly reach 10 billion. Another factor is general economic instability in Venezuela.
If the county finds a way to settle accounts with creditors, its rating may be raised again.
In the meanwhile, Venezuelan President Nicolas Maduro said last weekend that the country would never default.