S&P declares Venezuela in default

Venezuela begins refinancing its foreign debt

Ratings Agencies Cave: Venezuela Defaulted, Selectively

This was because the country failed to make a coupon payment on two of their bonds within the 30-day grace period.

The lowered rating is the latest strike to the oil-rich but cash-strapped country that's under massive financial pressure.

One reason Venezuela has been surprisingly steadfast in making bond payments is because the government needs to protect the credibility of state-owned oil company PetrĂ³leos de Venezuela (PDVSA), its last lifeline for income.

Beijing and Moscow have emerged as Venezuela's most reliable sources of funding, with China owed $28 billion and Russian Federation $8 billion.

Participants at the meeting told AFP that officials said the government meant to form working groups to evaluate short- and mid-term debt renegotiation proposals, but gave no specifics.

Bondholders had told Reuters on Monday they had not yet received payments on the 2019 and 2024 bonds but remained unconcerned by the delay, which they said was partly due to increased bank vigilance of Venezuelan transactions in the wake of USA sanctions.

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At the meeting with creditors, El Aissami read a statement blaming U.S. sanctions for delays to Venezuela's debt repayments.

The US has designated vice president El Aissami himself a drug kingpin with whom US entities are barred from dealing.

American investors can't participate in a restructuring anway, as sanctions prohibit them from receiving new bonds that Venezuela would issue.

A committee of the International Swaps and Derivatives Association (ISDA), meanwhile, is weighing whether holders of PDVSA debt with default insurance - credit default swaps - can collect payment. Nevertheless, his options are very limited.

Maduro is also under fire internationally for marginalizing the opposition, which controls the parliament, and stifling independent media.

"The positive climate in which this refinancing process began indicates that we will move forward and continue to build the welfare state that the people of Venezuela deserve", the official note added.

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