PdV will not miss scheduled $984mn bond maturity payment
PdV's bond maturities over the coming week include $984mn due tomorrow, $90mn due on 28 October and almost $1.17bn due on 2 November, totaling more than $2.24bn. If PdV misses any of these payments, it would trigger an immediate default because the contracts underpinning the three bonds in question - PdV 2017, PdV 2020 and PdV 2022 - do not feature 30-day grace periods for late payments.
But Venezuelan government finance officials insist unanimously that PdV will not default.
Venezuela "will continue faithfully honoring all of its debt obligations, including the late interest payments this month, despite efforts by the US government to hurt the country by crippling PdV financially with sanctions," a palace official told Argus.
"Venezuela has delayed interest payments on seven PdV and sovereign bonds this month because of the US sanctions, but we're still within the 30-day grace period before default clauses on those bonds are triggered, and we will fully cover all bond payments due in 2017," the official added.
Ven bonds dropped across the board today on growing concerns that a PdV default may be imminent.
It is not clear where PdV will get the cash to pay the looming debt. But the company and the central government have repeatedly eluded default in recent years through fresh loans, asset sales or financial maneuvers.
PdV effectively is already in commercial default with its joint venture partners, oil services firms and contractors that are owed up to a combined over $30bn in addition to the company's over $30bn of outstanding bond debt, according to the central bank's debt tables.
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