Venezuela 2016 Default Likely, PDVSA May Go First, Moody’s Says
- PDVSA is likely to default first, followed by the government
- External funding gap needs to narrow to avoid credit event
This article is for subscribers only.
Venezuela is “highly unlikely” to have enough hard currency to fully make its debt payments this year, although a default isn’t inevitable, according to a report from Moody’s Investors Service.
State-owned oil company Petroleos de Venezuela SA, which has large payments due this year, is likely to default before the sovereign, the credit ratings company said. That, in turn, could imperil government finances to the point it won’t be able to make payments either, according to the report. Moody’s said there is a non-negligible probability that a credit event for both could be avoided, although a default is more likely than not.