S&P Global Ratings downgraded its issue ratings on Venezuela's global bonds due 2025 and 2026 to D from CC after the country failed to make $237 million in coupon payments for the bonds within the 30-calendar-day grace period.
The ratings on Venezuela's global bonds due 2019 and 2024 also remain at D, S&P added, after seeing no evidence of payment to bondholders to date, despite the country's claim on Nov. 15 that it had started to initiate payment.
For the bonds due 2023 and 2028, the ratings could also be lowered to D if Venezuela fails to make the overdue coupon payments within the grace period, S&P said.
S&P lowered Venezuela's long- and short-term foreign-currency sovereign credit ratings to SD, or selective default, on Nov. 13. This followed President Nicolas Maduro's announcement that the country was planning to restructure its foreign debt. Long- and short-term local currency sovereign credit ratings remain at CCC-/C and are still on CreditWatch with negative implications, S&P said, reflecting its view of a 50% chance that Venezuela could default again within the next three months.
Amid the country's debt restructuring limbo, Reuters reported that holders of Venezuelan bonds are meeting with each other and considering creating alliances.
In the U.S., Millstein & Co. and bank industry group Institute of International Finance were looking at forming committees, the report said, citing advisers and fund managers as sources. Hedge fund MacroSynergy Partners has also invited bondholders to a Nov. 30 meeting in London to discuss the next steps for creditors.
Venezuela's negotiation with bondholders will be "long and difficult" due to the sanctions imposed by the U.S. on Maduro's government, according to S&P.
Fitch Ratings on Nov. 14 downgraded Venezuela's long-term foreign currency issuer default rating to RD, or restricted default, from C.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.
