S&P cuts Venezuela's sovereign debt rating to 'selective default'

Standard&Poor's downgraded its rating on the long-term debt of Venezuela after the Caribbean country missed $200m of coupon payments on already outstanding debt, even as Caracas prepares to attempt a restructuring of its foreign debt pile.

S&P cut its long-term foreign currency issuer debt rating from CC to 'selective default', keeping that on its short and long-term local currency debt at C and CCC-, respectively, albeit on Credit Watch negative.

While placing those latter two ratings on CreditWatch, S&P added that it saw a one-in-two chance Venezuela night default again within the coming three months.

The decision from the ratings agency followed the government's failure to make good on coupon payments for debt maturing in 2019 and 2024 within a 30-day grace period.

"If any potential restructuring operation is completed, we would lower all of our foreign currency ratings on Venezuela to default and subsequently raise them to the 'CCC' or 'B' category."