Venezuela has a 93% chance of defaulting on its debt

Venezuela insists that it’s not defaulting on its billions in oil-backed bonds, despite reeling more than any petrostate in the rapid 40% plunge of global oil prices. But the investment community doesn’t believe this reassurance. Judging by the bond market, the probability of Venezuela defaulting on its debt is 93%. The cost of Venezuela default insurance is now the highest of any country in the world. Investors must now pay $5.9 million in advance to insure against the default of $10 million of Venezuelan five-year bonds, plus $500,000 a year. That’s up from $894,000 in the summer, which was also regarded as high, and $2.7 million on Dec. 4. The implied probability of default is calculated from the default swap price. More…