Venezuela Officially Declared In Default

Today at 11am, the ISDA Determinations Committee sits down to decide whether an event of default has occurred due to the delayed principal payment on the Petroleos de Venezuela SA, or PDVSA, bond that matured Nov. 2, in the process triggering PDVSA (and perhaps Venezuela) CDS, and officially declaring Venezuela in default.

We won't have to wait that long: moments ago, Wilmington Trust, the Trustee of the 8.5% bonds due 2018, issued by Corpoelec, Venezuela's electricity company, declared that the missed interest payment originally due October 10, and whose 30 day grace period expired on November 9, and for which no pament was sent or received, officially constitutes an event of default.

From Bloomberg:

From the statement:

Wilmington Trust, National Association is communicating the following to you in its capacity as successor trustee (the “Trustee”) to The Bank of New York, as trustee, under the Indenture dated as of April 10, 2008 (the “Indenture”) for the $650,000,000 8.50% Senior Notes due 2018 (the “Notes”) of C.A. La Electricidad de Caracas (the “Issuer”). In a letter to the Trustee and various other parties dated November 30, 2012, National Electricity Corporation, S.A. (CORPOELEC) advised that it is the successor by merger to the Issuer. Capitalized terms used herein but not defined herein shall have the respective meanings set forth in the Indenture.

 

Please be advised that the Paying Agent with respect to the Notes has advised the Trustee that the payment of interest on the Notes that was due on October 10, 2017 was not received by the Paying Agent. The Issuer’s failure to pay interest on the Notes when due on October 10, 2017 constitutes a Default under the Indenture. The Paying Agent has further notified the Trustee that the interest payment was not received by November 9, 2017.

 

The Issuer’s failure to pay the overdue interest on the Notes on or before November 9, 2017 constitutes an Event of Default under Section 5.1(ii) of the Indenture. Pursuant to Section 5.1(b) of the Indenture, if an Event of Default shall occur and be continuing and has not been waived, the Holders of at least 25% in principal amount of Outstanding Notes may declare the principal of, and premium, if any, accrued interest and Additional Amounts, if any, on all the Notes to be due and payable by notice in writing to the Issuer and the Trustee specifying the Event of Default and that such notice is a “notice of acceleration”, and the same shall become immediately due and payable.

It is unclear if this formal default declaration makes today's ISDA determinations committee decision moot, however it now looks quite certain that Monday's meeting between creditors and the country's vice president and chief debt negotiatior, who also happens to be a US-sanctioned drug kingpin, will no longer be necessary.

Today's news will not come as a surprise to CDS holders, who had already priced in a 99.99% probability of default in 5 years.

The full statement is below:

Comments

Number 9 Fri, 11/10/2017 - 10:52 Permalink

imf hitWilmington Trust, National Association is communicating the following to you in its capacity as successor trustee (the “Trustee”) to The Bank of New York, as trustee, under the Indenture dated as of April 10, 2008 (the “Indenture”) for the $650,000,000 8.50% Senior Notes due 2018 (the “Notes”) of C.A. La Electricidad de Caracas (the “Issuer”). In a letter to the Trustee and various other parties dated November 30, 2012, National Electricity Corporation, S.A. (CORPOELEC) advised that it is the successor by merger to the Issuer. Capitalized terms used herein but not defined herein shall have the respective meanings set forth in the Indenture.  money for nothing..and the countries resources for free..evil is as evil does and these reptilian banksters are evil incarnate. 

Manthong cossack55 Fri, 11/10/2017 - 11:05 Permalink

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:"";
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin-top:0in;
mso-para-margin-right:0in;
mso-para-margin-bottom:10.0pt;
mso-para-margin-left:0in;
line-height:115%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:"Calibri","sans-serif";
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;
mso-bidi-font-family:"Times New Roman";
mso-bidi-theme-font:minor-bidi;}
 LongTP

In reply to by cossack55

eatthebanksters eforce Fri, 11/10/2017 - 14:36 Permalink

Its not going to be too much longer before Maduro ends up with his neck stretched or his lead content increased...I will applaud the day that scumbag is killed.  He'l be an example to all the other tyrants who pretend to be something they are not...  The guy started as a bus driver, what the fuck does anyone expect.

In reply to by eforce

Gap Admirer dasein211 Fri, 11/10/2017 - 12:46 Permalink

"How do you bitch about socialism and the left when our capitalism is just essentially socialism for the rich? There’s no capitalism. Never was."Where did I say that the U.S had/has a capitalist system?  We don't.  We have crony capitalism/fascism where the government and government connected get wealthy (see Hillary Clinton for example - never had a real job - now INCREDIBLY wealthy).  Much like socialism.There are examples of people making it but that's usually in spite of government.I would love to try a true free market capitalism system some day.

In reply to by dasein211

fockewulf190 ReturnOfDaMac Fri, 11/10/2017 - 19:16 Permalink

First example that comes to mind is Singapore. But, even if capitalism in it’s true form were to exist worldwide, eventually it would utterly fail because the available resources of the planet would become exhausted because of the need for perpetual growth. The only way that outcome could be avoided is through the discovery of a sustainable and abundant source of energy capable of meeting planetary needs, as well as technological advances in space transportation and mining. Discovering exactly what gravity is and achieving the capability to modify it’s effects on matter is what buys us entrance to a Type 0 civilization. Only thing is, the human race must attain these achievements before it’s conventional resources run out, and before the environment is destroyed. Avoiding a worldwide nuclear war, and being able to prevent extinction level events such as a massive asteroid collision goes without saying.

In reply to by ReturnOfDaMac

MEFOBILLS Number 9 Fri, 11/10/2017 - 14:16 Permalink

An oil rich country targeted "Economic Hitman" style.  No, it couldn't be that?Then more hitman actions, such as larding debt paper onto the economy.   Said debts are to preferably be denominated in a foreign currency, ideally dollars.Debts then grow exponentially, outside of natures ability to pay.   Even better, the original debt money was aimed at leaders to then corrupt them.  When the local money can no longer exchange for enough dollars, to pay the Usury, then call in the Marines!Yeah right - Socialism is the problem.  Not that I'm a socialist, but simple minded slogans do not reveal the root problems, they obscure the problems.  Did I say simple minded... how about brain washed, or simply ignorant about how things actually work?  Read Perkins book, Confessions of an Economic Hitman, to disabuse yourself of false implanted knowledge. (Actually Vince Foster, not you number 9)The historical record is clear ... mixed economies are the ones that deliver.  Mixed economies have some socialist redistribution.  Why?  Because there are rent -seekers in any economy, rent seekers take unearned income and sordid gain. 

In reply to by Number 9

Number 9 Richard Chesler Fri, 11/10/2017 - 11:01 Permalink

Wilmington Trust, National Association is communicating the following to you in its capacity as successor trustee (the “Trustee”) to The Bank of New York, as trustee, under the Indenture dated as of April 10, 2008 (the “Indenture”) for the $650,000,000 8.50% Senior Notes due 2018 (the “Notes”) of C.A. La Electricidad de Caracas (the “Issuer”). In a letter to the Trustee and various other parties dated November 30, 2012, National Electricity Corporation, S.A. (CORPOELEC) advised that it is the successor by merger to the Issuer. Capitalized terms used herein but not defined herein shall have the respective meanings set forth in the Indenture.  how many times you have to read this to finally figure the reptilian banksters hooked them with usury?

In reply to by Richard Chesler

Number 9 Richard Chesler Fri, 11/10/2017 - 11:30 Permalink

still doesn't negate the fact that the jew bankers knew exactly what they were doing.. it is the same fvkin playbook played over and over around the world..borrow from the imf the digits at interest and hand over your country to the parasites..money for nothing and countries for freetoo bad the people end up starving and killing each other for a roll of toilet paper but of course if one was to pay attention this is the end game they crave..the blood of innocents sacrificed on the alter to Moloch..get it yet? this is how evil works.. 

In reply to by Richard Chesler

MEFOBILLS how_this_stuff_works Fri, 11/10/2017 - 18:03 Permalink

Usury is the taking of something for nothing.  Defining usury as high interest is not good.  It confuses people.During Benjamin Franklin's state banking period (Philadelphia Colony), they would make land loans.  It was simple interest, paid three times a year I think (from memory).The bank would collect the interest, and then respend it back out into the economy on things like bridges, ports, infrastructure.  The bank (and colony) would spend even a little more from nothing (debt free), so that debtors had money in the supply, available for paying back interest on the loan.  Franklin was suprised at how well it worked.The action of this interest was not usurious.  On its path, it did beneficial things.  It was not something for nothing, it worked to improve the commons.  Taxes were also low.  Parasites take something for nothing, living off the energy of their host.Having some debt free money in Franklin's supply also lowered the costs of transactions, as this money had no interest attached to it at all.  Again, system was not usurious.Let's contrast wtih todays private banks.  The interest they rake in, tends to go into the Casino (Wall Street).  There it trades for more paper, and all of these papers are making claims on the real economy.  Yet, the real economy is not being improved.  Infrastructure especially is not getting funded.Money's true nature is law, and hence money belongs in public sphere ... it is part of the commons since everybody uses it.  Properly codified, interest can be beneficial.Another example:  During the sovereign period in Canada 1933-1974, if you wanted to buy a house, you had to borrow from a trust.  This trust consisted of older people's savings..   It was not a bank, and did not conjure up new credit from nothing.  This was existing money that went into housing upon making a new loan. When younger people paid it back to the trust, the older people had some income to live on.  The older people then spent it into the economy creating demand for goods the young people created.... in this way, the interest cycled back to the younger people in a generational transfer.  The older people had created starting after the war, hospitals and schools, using debt free money, so the young people (later in the cycle around 1950) had almost free access to public services.By 1974, people had enough savings, and were pooling their money to start small business.  This was kicking the ass of large corporations, creating efficient local economy, but banks were being cut out of the equation.  Banks were not getting their desired cut out of the economy.  So, the BIS made a raid on Canada, bribed the politicians, and forced them to become debt spreading like the U.S and England.  This graph of public debt in Canada shows the impact of changes done in 1974:http://qualicuminstitute.ca/wp-content/uploads/2011/12/fedebt1.png

In reply to by how_this_stuff_works

44magnum Richard Chesler Fri, 11/10/2017 - 11:23 Permalink

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:"";
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin-top:0in;
mso-para-margin-right:0in;
mso-para-margin-bottom:10.0pt;
mso-para-margin-left:0in;
line-height:115%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:"Calibri","sans-serif";
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;}
If one understands that socialism is not a share-the-wealth program, but is in reality a method to consolidate and control the wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs,” explained the late Gary Allen. “Communism or more accurately, socialism, is not a movement of the downtrodden masses, but of the economic elite.”

In reply to by Richard Chesler

MEFOBILLS Number 9 Fri, 11/10/2017 - 14:25 Permalink

Number 9, they are not stupid fvks, just brainwashed. It is very difficult to overcome a lifetime of hypnosis.  If the TEEEEVEEE says it must be so, then it is.   To live in America is to swim in false signaling.  Publik skoooools deliver indoctrination from day one.Recently, a survey was done on Poltiicans in England.  The majority of them do not understand where money comes from.  If they don't understand something fundamental, then they are easy to manipulate, especially with foreign loans.Even Trump is advocting for Chinese to invest in Puerto Rico, which means Trump doesn't understand how money works either.  A sovereign country has its own money, and does not need "foreign' capital.In order to get rid of parasitic debt, you have to cancel it.  A simple legal precedent:  If the principle has been paid 1.5X then the debt instrument should be canceled.  Default is another word for canceling.

In reply to by Number 9

Mandel Bot NoDebt Fri, 11/10/2017 - 11:04 Permalink

I was at a party in Caracas several years ago. A Venezuelan told me the following joke:"When God created the world, he was near the end of the sixth day when he realized he had a big pile of gold, silver, oil, copper and excellent farmland left to distribute. Being tired, he dumped it all down in one place. Upon reflection he decided that was too much good stuff to put in one location so, to compensate, he populated the region with Venezuelans."

In reply to by NoDebt