EspañolStandard & Poor’s has downgraded the credit rating of oil company Petroleos of Venezuela SA (PDVSA).
In a statement, the financial company said it lowered the corporate credit rating (from CCC to CC) of Venezuela’s state oil company for being vulnerable and untrustworthy.
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The new rating corresponds to risky investments, the statement also said. S&P officials said they believe PDVSA is “highly vulnerable, with a high speculative level.” They also it said there is little prospect that PDVSA will recover before an imminent default.
Though Venezuela is still complying with payments, the rating agency’s officials said it expects PDVSA to default.
PDVSA recently announced new conditions for voluntary exchanges of bonds that would meet its owed debt through 2017.
PDVSA has a bond-swap deal starting September 29 in which $950 of securities will be paid per $1,000.
“The oil and gas company of Venezuela PDVSA announced a debt exchange offer,” the S&P statement said. “We see it as a sign of difficulties if completed. Under the proposed transaction, the company would exchange its senior unsecured bonds 5.25 percent and 8.5 percent due 2017 for new bonds to 8.5 percent due in 2020.”
Similarly, the US company said the completion of the bond exchange offer will reduce the corporate credit rating to “SD” and senior issuance bonds to “D” again.
On Monday, September 19, bonds with state oil opened lower after PDVSA announced a voluntary debt swap of about US $ 7.1 billion