Could the oil slump push this country to default?

The cost of protecting against a Venezuelan default has hit record highs, leading to fears that the oil-dependent country could become the first sovereign victim of plummeting oil prices.  Spreads on Venezuelan five-year credit default swaps (CDS)—derivatives that can be used to hedge against the risk of a country or corporate defaulting—are at their highest since the global financial crisis of 2007/08, indicating heightened expectations of the government failing to repay its debts. This comes at the South American country grapples with a toxic combination of U.S sanctions, recession and hyperinflation, with economic mismanagement and a 50 percent collapse in oil prices bringing it to its knees. More…