Venezuelan President Nicolás Maduro has a message for the creditors to whom his country owes $150 billion or so: “Venezuela will never get to a default.”
Standard & Poor’s also has a message to those very same bondholders:
S&P downgraded Venezuela’s long-term debt rating to selective default late Monday after it said the government failed to make two bond coupon payments….
Technically, at the moment, both statements are true: Venezuela is in some kind of default in the strict sense of not paying its bills and on account of S&P being a real dick about insisting that South American countries pay their bills, and on time. But it’s not really in default default until a quarter of the people who own selectively defaulted bonds get together and start shouting, “DEFAULT! DEFAULT!” in front of the Presidential Palace in Caracas. Which Maduro says they totally won’t do, and not only because he’d have them shot for it.
On his weekly television show Sunday, Mr. Maduro said 414 investors had confirmed their participation for the meeting, which he said accounted for more than 90% of the country’s creditors.
Between Sunday and yesterday, however, many of them seem to have had second thoughts about keeping their appointment with Maduro’s restructuring committee.
Venezuelan officials provided few details about how they would move forward with a planned debt restructuring during a brief meeting with bondholders at the presidential palace Monday afternoon, according to people who said they attended it.
Most major investment funds skipped the Monday meeting with Mr. Maduro’s restructuring commission, which included two officials blacklisted by the U.S. for alleged drug trafficking and corruption. None of the commission members have an economics or finance background.