On Wednesday, when looking at the
imminent principal payment on $842 million in debt issued by Venezuela's
state-run oil company PDVSA , we warned that the state - which had previously
activated a 30-day grace period on over $586 million in interest payment due
over the past month - may be bankrupt shortly for one specific reason: unlike
the rest of the country's debt, the PDVSA bonds have no grace period in the
bond indenture for an event of default. It is also why some suggested that
Venezuela was shoring up dollars by not repaying other debt, to have funds available
for this particular issue. More…
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