Venezuela Officially Declared In Default | Zero Hedge
Description: "The Issuer’s failure to pay interest on the Notes when due on October 10, 2017 constitutes a Default under the Indenture. The Paying Agent has further notified the Trustee that the interest payment was not received by November 9, 2017. "
Keywords: Zero Hedge,Zerohedge,Finance,Economics,Markets,Politics,Analysis,8.5%,B+,Bank of New York,Bond,CDS,Creditors,default,PDVSA
Date: 2017-11-10T00:00:00Z

### Art Cashin Lays Out Risks in Current Market

by The_Real_Fly - Nov 9, 2017 1:26 PM

Politics, bond market, tax cuts.

### The Year Was 1989...

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This long-forgotten market is on fire!

### Prepare For Interest Rate Rises And Global Debt Bubble Collapse

by GoldCore - Nov 9, 2017 7:53 AM

700-year average real interest rate is 4.78% (must see chart).

# Venezuela Officially Declared In Default

by Tyler Durden
Nov 10, 2017 10:47 AM
0
SHARES

Today at 11am, the ISDA Determinations Committee sits down to decide whether an event of default has occurred due to the delayed principal payment on the Petroleos de Venezuela SA, or PDVSA, bond that matured Nov. 2, in the process triggering PDVSA (and perhaps Venezuela) CDS, and officially declaring Venezuela in default.

We won't have to wait that long: moments ago, Wilmington Trust, the Trustee of the 8.5% bonds due 2018, issued by Corpoelec, Venezuela's electricity company, declared that the missed interest payment originally due October 10, and whose 30 day grace period expired on November 9, and for which no pament was sent or received, officially constitutes an event of default.

From Bloomberg:

From the statement:

> Wilmington Trust, National Association is communicating the following to you in its capacity as successor trustee (the “Trustee”) to The Bank of New York, as trustee, under the Indenture dated as of April 10, 2008 (the “Indenture”) for the $650,000,000 8.50% Senior Notes due 2018 (the “Notes”) of C.A. La Electricidad de Caracas (the “Issuer”). In a letter to the Trustee and various other parties dated November 30, 2012, National Electricity Corporation, S.A. (CORPOELEC) advised that it is the successor by merger to the Issuer. Capitalized terms used herein but not defined herein shall have the respective meanings set forth in the Indenture.

> Please be advised that the Paying Agent with respect to the Notes has advised the Trustee that the payment of interest on the Notes that was due on October 10, 2017 was not received by the Paying Agent. The Issuer’s failure to pay interest on the Notes when due on October 10, 2017 constitutes a Default under the Indenture. The Paying Agent has further notified the Trustee that the interest payment was not received by November 9, 2017.

> The Issuer’s failure to pay the overdue interest on the Notes on or before November 9, 2017 constitutes an Event of Default under Section 5.1(ii) of the Indenture. Pursuant to Section 5.1(b) of the Indenture, if an Event of Default shall occur and be continuing and has not been waived, the Holders of at least 25% in principal amount of Outstanding Notes may declare the principal of, and premium, if any, accrued interest and Additional Amounts, if any, on all the Notes to be due and payable by notice in writing to the Issuer and the Trustee specifying the Event of Default and that such notice is a “notice of acceleration”, and the same shall become immediately due and payable.

It is unclear if this formal default declaration makes today's ISDA determinations committee decision moot, however it now looks quite certain that Monday's meeting between creditors and the country's vice president and chief debt negotiatior, who also happens to be a US-sanctioned drug kingpin, will no longer be necessary.

Today's news will not come as a surprise to CDS holders, who had already priced in a 99.99% probability of default in 5 years.

The full statement is below:

- default
- CDS
- Creditors
- B+
- Bond
- 8.5%
- Bank of New York
- PDVSA

- Printer-friendly version
- Nov 10, 2017 10:47 AM
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## Comment viewing options

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Number 9 Nov 10, 2017 10:52 AM

imf hit

Wilmington Trust, National Association is communicating the following to you in its capacity as successor trustee (the “Trustee”) to The Bank of New York, as trustee, under the Indenture dated as of April 10, 2008 (the “Indenture”) for the $650,000,000 8.50% Senior Notes due 2018 (the “Notes”) of C.A. La Electricidad de Caracas (the “Issuer”). In a letter to the Trustee and various other parties dated November 30, 2012, National Electricity Corporation, S.A. (CORPOELEC) advised that it is the successor by merger to the Issuer. Capitalized terms used herein but not defined herein shall have the respective meanings set forth in the Indenture.

money for nothing..and the countries resources for free..

evil is as evil does and these reptilian banksters are evil incarnate.

VinceFostersGhost Number 9 Nov 10, 2017 10:56 AM

Socialism..........when will they learn?

Number 9 VinceFostersGhost Nov 10, 2017 11:00 AM

parasitism

look across Europe..socialism seems to work there..

lets make no mistake, this is a jew banskter hit,,

cossack55 Number 9 Nov 10, 2017 11:00 AM

Fuck ISDA, IMF and the BIS in no particular order

Cognitive Dissonance cossack55 Nov 10, 2017 11:04 AM

It's so official when it is written in legalese.

Like it's real money or something.

Manthong cossack55 Nov 10, 2017 11:05 AM

LongTP

Gap Admirer Manthong Nov 10, 2017 11:32 AM

They just didn't have the "smart" people running their socialism. The Bern, Hillary, Dear Leader Obama. They would have made it paradise.

peddling-fiction cossack55 Nov 10, 2017 11:06 AM

VE defaulted.

Now WW3 can begin in the Middle East.

Oil prices have been kept down to crush VE.

VE will not give in though.

pazmaker Number 9 Nov 10, 2017 11:10 AM

you forgot the "Sarc"

That was funny!!!

Richard Chesler VinceFostersGhost Nov 10, 2017 10:58 AM

Socialist thieves and thugs are no better than banksters.

Number 9 Richard Chesler Nov 10, 2017 11:01 AM

Wilmington Trust, National Association is communicating the following to you in its capacity as successor trustee (the “Trustee”) to The Bank of New York, as trustee, under the Indenture dated as of April 10, 2008 (the “Indenture”) for the $650,000,000 8.50% Senior Notes due 2018 (the “Notes”) of C.A. La Electricidad de Caracas (the “Issuer”). In a letter to the Trustee and various other parties dated November 30, 2012, National Electricity Corporation, S.A. (CORPOELEC) advised that it is the successor by merger to the Issuer. Capitalized terms used herein but not defined herein shall have the respective meanings set forth in the Indenture.

how many times you have to read this to finally figure the reptilian banksters hooked them with usury?

Richard Chesler Number 9 Nov 10, 2017 11:08 AM

What? You thought $650,000,000 went to build or maintain needed infrastructure?

It's all in the pockets of chavista thugs while people suffer.

Motherfuckers are made for each other.

Number 9 Richard Chesler Nov 10, 2017 11:30 AM

still doesn't negate the fact that the jew bankers knew exactly what they were doing.. it is the same fvkin playbook played over and over around the world..

borrow from the imf the digits at interest and hand over your country to the parasites..

money for nothing and countries for free

too bad the people end up starving and killing each other for a roll of toilet paper but of course if one was to pay attention this is the end game they crave..

the blood of innocents sacrificed on the alter to Moloch..

get it yet? this is how evil works..

how_this_stuff_works Number 9 Nov 10, 2017 11:11 AM

" how many times you have to read this to finally figure the reptilian banksters hooked them with usury?"

I'd be thrilled if all my credit card company was 8.5% interest.

29.9%? Now THAT'S usury.

Number 9 how_this_stuff_works Nov 10, 2017 11:22 AM

your credit sux..i can borrow thousands interest free for 2 years..

44magnum Richard Chesler Nov 10, 2017 11:23 AM

If one understands that socialism is not a share-the-wealth program, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs,” explained the late Gary Allen. “Communism or more accurately, socialism, is not a movement of the downtrodden masses, but of the economic elite.”

truthseeker69 Number 9 Nov 10, 2017 10:57 AM

LOL - Poor little Maduro and his cronies were "forced" to take IMF money.

Grow up.

Number 9 truthseeker69 Nov 10, 2017 11:02 AM

stupid fvk.. read the confessions of an economic hitman and then get back to me..

toady truthseeker69 Nov 10, 2017 11:04 AM

Maduro ain't no Chavez.... he's just the fall guy.

LawsofPhysics Number 9 Nov 10, 2017 11:21 AM

Indeed, but good luck trying to collect on that CDS etc.

When fraud is the status quo, possession is the fucking law.

Number 9 LawsofPhysics Nov 10, 2017 11:44 AM

if you have the guns to back it up.. Venezuela is probably the next country we must invade to liberate from all the chaos.

USA USA Nov 10, 2017 10:51 AM

So reposses the country?

NoDebt Nov 10, 2017 10:52 AM

Maybe they can borrow money from somebody else to pay us back.

Number 9 NoDebt Nov 10, 2017 10:57 AM

maybe they should be allowed to float fiat back the other way..

just saying

wtf does a country have to borrow from the jews?

how many more dead will it t take before these reptilians are satisfied?

i guess the 100 million from last century is just the opening act..

WOWurstupid Number 9 Nov 10, 2017 11:03 AM

oh yea predatory bankers are the problem

Number 9 WOWurstupid Nov 10, 2017 11:07 AM

all wars are banker wars and make no mistake..what is happening in vens and around the world is the bankers on the full court press.

44magnum Number 9 Nov 10, 2017 11:24 AM

money from nothing for something

Mandel Bot NoDebt Nov 10, 2017 11:04 AM

I was at a party in Caracas several years ago. A Venezuelan told me the following joke:

"When God created the world, he was near the end of the sixth day when he realized he had a big pile of gold, silver, oil, copper and excellent farmland left to distribute. Being tired, he dumped it all down in one place. Upon reflection he decided that was too much good stuff to put in one location so, to compensate, he populated the region with Venezuelans."

asscannon101 NoDebt Nov 10, 2017 11:06 AM

The Greeks will float them a few Euro until payday...

SillySalesmanQu... NoDebt Nov 10, 2017 11:18 AM

Maybe the FED will loan them their printing press...

Akzed NoDebt Nov 10, 2017 11:44 AM

Maduro should take a loan on his 401(k).

Kaiser Sousa Nov 10, 2017 10:52 AM

Dow 30,000.

VladLenin Nov 10, 2017 10:53 AM

I heard PDVSA wrote them a check, but just asked it be held until the end of the month.

jamesmmu Nov 10, 2017 10:53 AM

this is the last stage of socialism

truthseeker69 Nov 10, 2017 10:57 AM

Who in their right mind keeps loaning money to Venezuela? Fucking morons are now left with a bag of shit.

On the other hand, Maduro and his cronies are done - unless the Ruskies or the Chinks step in.

cossack55 truthseeker69 Nov 10, 2017 11:02 AM

Greece?

secretargentman truthseeker69 Nov 10, 2017 11:11 AM

Who? Fvckers who think Uncle Scam will bail them out 'cause they're too big to fail. That's who.

rf80412 truthseeker69 Nov 10, 2017 11:25 AM

> Who in their right mind keeps loaning money to Venezuela?

Investors seeking yield, that's who. Bonds yielding near-zero aren't good investments from their POV. They want income, dammit.

Mike Masr Nov 10, 2017 10:55 AM

Time for the US to meddle and interfere with a good ole fashioned neocon regime change.

Where is Vicki Nuland and Geoffrey Pyatt when you need them? (sarc)

chubbar Nov 10, 2017 10:55 AM

Pretty sure an 8.5% bond was going to default at some point. Wonder what the CDS picture looks like? Any chance this could be a snowflake that starts an avalanche?

rf80412 chubbar Nov 10, 2017 11:23 AM

Debt is an income-producing asset to those who own it. Default makes that asset, and the income derived from it, go poof. Other debt instruments - also income-producing assets - are leveraged off the original [sovereign] debt. They go poof too. Bank stocks take a hit, as would any other company had suddenly had a big hole blown in its revenues.

LawsofPhysics rf80412 Nov 10, 2017 11:28 AM

Correct, but then again, you are assuming an honest "mark to market" accounting model and just rule of law.

I don't think we have that anywhere anymore...

Lord Raglan Nov 10, 2017 10:56 AM

We should have as much courage.........

lasvegaspersona Nov 10, 2017 10:57 AM

Wonder how many side bets there were....anyone here try to get in on the CDS racket?

Who pays those off? Who do those folks owe money to? When does this train leave the station?

One of these days some trivial miss on a measley $650M bond coulld cause some real headaches.

ToSoft4Truth Nov 10, 2017 10:57 AM

Is the Saudi Prince money wallpapering this default?

coast1 Nov 10, 2017 10:57 AM

can somebody give me a good place to go to to buy bitcoin cash? Damn it seems so complicated..And I read that if you owned bitcoin, you own bitcoin cash too? So if bitcoin went down and botcoin cash went up, you broke even? Everything is so confusing...

Yellow_Snow coast1 Nov 10, 2017 11:00 AM

Cryptopia

Don't buy at these prices...

coast1 coast1 Nov 10, 2017 11:01 AM

bitcoin cash is $805 but they want $250 as a fee? That is much more than paying over spot price for gold...wtf?

WOWurstupid coast1 Nov 10, 2017 11:04 AM

venezuela

ParticularlyStu... coast1 Nov 10, 2017 11:36 AM

If it's not Bitcoin, it's a shitcoin.

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