MOSCOW/CARACAS (Reuters) – Venezuela won easier debt terms from Russia and got a vote of confidence from China on Wednesday, as the oil-rich country said it had starting making interest payments on bonds after a delay that had threatened to trigger a default.
A debt restructuring deal with Russia that allows Caracas to make “minimal” payments to Moscow in the next six years, together with a separate statement from the Chinese Foreign Ministry that Venezuela was capable of handing the debt issue “appropriately,” underlined the reserve of support its socialist government enjoys from both countries.
Venezuela - Billions - Dollars - Russia - China
Venezuela has borrowed billions of dollars from Russia and China over the years, primarily through oil-for-loan deals that have crimped the country’s hard currency revenue by requiring oil shipments to be used to service those loans.
If backed by more debt forgiveness like that offered by Russia on Wednesday, the two countries could provide a lifeline to Venezuela as it seeks to keep its deeply depressed economy solvent, even as U.S. and European sanctions target the government of President Nicolas Maduro.
Critics - United - States - Maduro - Dictator
Critics led by the United States have slammed Maduro as a dictator and assailed him for clamping down on the country’s opposition, jailing dissenters and nullifying the powers of its democratically-elected National Assembly.
Venezuelan bond prices have been on a roller-coaster over the past 10 days, as Maduro called investors to debt restructuring talks, while pledging to keep honoring the country’s obligations. But S&P Global Ratings declared it in selective default on two of its sovereign bonds early this week after it failed to make the coupons within a 30-day grace period.
Wednesday - Economy - Ministry - Interest - Payments
On Wednesday, the Economy Ministry said it had started transferring $200 million in interest payments on those bonds, which mature in 2019 and 2024.
The 2019 bonds edged up 0.25 points or about 1 percent, while the 2024 bonds...
Wake Up To Breaking News!