Venezuela 2016 Default Likely, PDVSA May Go First, Moody’s Says – Bloomberg

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.Close all those tabs. Open this email.Get Bloomberg’s daily newsletter. Sign UpState-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.Venezuela’s debt is the most expensive in the world to insure against non-payment using credit-default swaps, after the tumble of the price in oil, which makes up about 95 percent of the country’s export revenue, eroded its hard currency reserves. The International Monetary Fund predicts its economy will shrink 8 percent in 2016, while inflation rate will reach about 480 percent.

Source: Venezuela 2016 Default Likely, PDVSA May Go First, Moody’s Says – Bloomberg

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