OREANDA-NEWS. Petroleos de Venezuela S.A.'s (PDVSA) 'CCC' rating suggests a real possibility of default with average recovery for bondholders likely at the bottom of 31%-50% range, according to the latest report in Fitch Ratings' 10 report series Top 10 Most-Actively Traded LatAm Corporates.

One report in the series will be released each day through Feb. 13 per the schedule found at the bottom of this release.

'Recovery would be highly dependent on the company's and the government's willingness to provide concessions to bondholders to be able to access debt capital markets in the future,' said Lucas Aristizabal, Senior Director.

'The bulk of the company's assets are in Venezuela, and oil and gas reserves, the most valuable asset from a recovery perspective, belong to the government. Other assets abroad will provide very limited recovery for bondholders due to structural subordinations.'

Fitch expects investors will have limited ability to embargo in-transit oil vessels to bolster recovery.

PDVSA's liquidity position will deteriorate significantly during 2015 should oil prices remain at current levels throughout the year, the company is not able to access debt capital markets, and the government does not reduce transfers.

PDVSA's negative funds from operations before borrowings from the central government significantly exposes the company to oil price downturns.

A Bolivar devaluation could harm PDVSA's cash flow generation if the government continues to require the company to exchange its export proceeds at the lower exchange rate. Currently, there are three exchange rates prevailing in Venezuela and PDVSA exchanges approximately 80% of its export proceeds at the two lowest rates.

Fitch's Top 10 Most-Actively Traded LatAm Corporates series will be released one report per day as follows:
Feb. 2: Oi Scenario Analysis - Asset Sales and Industry Consolidation are Key to Credit Profile Recovery
Feb. 3: Cemex Scenario Analysis - Road to Investment Grade Runs through the U.S.
Feb. 4: Ecopetrol Price and FX Sensitivity Analysis - Rating Linkage with Sovereign Could Weaken
Feb. 5: America Movil Scenario Analysis - No Separation Anxiety
Feb. 6: Vale Scenario Analysis - Ratings Rock Solid Despite Industry Softness
Feb. 9: Pacific Rubiales Scenario Analysis - Preserving Liquidity Depletes Reserves
Feb. 10: PDVSA - Something's Gotta Give
Feb. 11: Cencosud Scenario Analysis - What Factors Could Stabililze the Company's 'BBB-' Rating
Feb. 12: Construtora Norberto Odebrecht Scenario Analysis - Could CNO Lose its Investment Grade Rating due to Lava Jato Scandal?
Feb. 13: Petrobras - A Political Labyrinth

For more information, a special report titled 'PDVSA - Something's Got to Give' is available on the Fitch Ratings web site at www.fitchratings.com.