The International Swaps and Derivatives Association declared that Venezuela defaulted on its sovereign bonds and the debt of its state-run oil company Petroleos de Venezuela, or PDVSA, on Nov. 16. That was nearly two weeks after Venezuelan President Nicolas Maduro announced intentions to restructure the country’s debt pile of more than $60 billion, prompting a further sell-off in the already low-priced bonds.
Over the past few years, Maduro’s mismanagement of PDVSA has led to a crippling recession and shortages of food and medicine despite the country’s massive crude oil reserves. And Maduro’s recent takeover of the legislature led to U.S. sanctions on trading newer bonds and dividend payments from Citgo (PDVSA’s U.S. oil-refinery arm) back to Venezuela.
Karin Anderson does not own shares in any of the securities mentioned above.
Benjamin Joseph does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.