Tag Archives: Credit Rating

Jun
28
2013
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In Case You Missed It…Articles Roundup Week of 6/28/13

madurocadena1.520.360 e1372450486683 In Case You Missed It…Articles Roundup Week of 6/28/13

Courtesy of: VTV

This week: Reports emerge that Snowden may be headed to Venezuela via Havana, though his whereabouts remain unconfirmed; the US urges Ecuador, Cuba and Venezuela not to grant asylum to Snowden, yet Maduro expresses support for Snowden; Roberta Jacobson,  US Deputy Secretary of State for Latin America, meets with the Venezuelan chargé d’affaires in a sign that the two countries may normalize relations; Maduro makes his first official visit to Haiti; Venezuela plans to make its foreign currency system more flexible by reviving a stalled dollar auction scheme in July; in a further attempt to boost alleviate growing debt, Venezuela looks  to devalue the Bolivar by “stealth”; Standard & Poor lowers its long-term currency credit ratings on Venezuela from ‘B+’ to ‘B’; the Venezuelan government illegally records conversation between an opposition lawmaker and a local academic; the consultancy IHS Jane’s releases a report stating that Venezuela was the main purchaser of weapons in 2012; Maduro upsets Venezuelan journalists by giving Chavez a posthumous journalism award; During the celebration of the 192th anniversary of Battle of Carabobo, Maduro claims that “Corruption is going to engulf [Venezuela],” yet he continues to neglect enforcing rule of law.

Snowden heads to Venezuela via Moscow, Havana: airline source, Reuters

Former U.S. National Security Agency contractor Edward Snowden will fly from Moscow to Cuba on Monday and then plans to go to Venezuela, a source at the Russian airline Aeroflot said on Sunday. The source said Snowden was already on his way to Moscow from Hong Kong and would leave for Havana within 24 hours. The South China Morning Post also reported that Snowden had left Hong Kong for Moscow and that his final destination might be Ecuador or Iceland.

US urges Ecuador, Cuba and Venezuela not to grant asylum to Snowden, El Universal

The US government on Sunday urged Ecuador not to grant political asylum to Edward Snowden, a former National Security Agency contractor who sought refuge at the South American country after revealing Internet surveillance programs implemented by the US authorities, CNN reported. According to a source consulted by CNN, Washington also requested Venezuela and Cuba not to grant asylum to Snowden, which are other two likely destinations for Snowden, DPA reported.

Maduro: Venezuela ‘would consider asylum for Snowden’, BBC

Venezuela’s President Nicolas Maduro has said his country would consider an asylum application from fugitive US whistleblower Edward Snowden. “We say and advocate that someone in the world should stand with this young man and protect him, the revelations he has made with courage serve to change the world,” he said. Mr Maduro said that Venezuela had not received any such request, but would evaluate any application for asylum from Mr Snowden, because “every case is a humanitarian protection”. He was speaking from Port-au-Prince, during his first official visit to Haiti.

Venezuela voices solidarity with Ecuador for support to Snowden, El Universal

Once again, Edward Snowden, a former agent and expert of the CIA, was on the agenda of Venezuelan President Nicolás Maduro, who said Thursday night that, if requested humanitarian support or asylum for Snowden, Venezuela would not hesitate to grant it. In this regard, hailing Snowden for his revelations, Maduro said he supported President of Ecuador Rafael Correa for taking a firm stance vis-à-vis Washington’s warnings against Ecuador if it granted asylum to the former agent.

Venezuelan chargé d’affaires meets with US Deputy Secretary of State, El Universal

The chargé d’affaires of Venezuela in Washington, Calixto Ortega, met on Tuesday with the US Deputy Secretary of State for Latin America, Roberta Jacobson, three weeks after the respective foreign ministers took a first step towards rapprochement at the Assembly of the Organization of American States (OAS) in Guatemala. At the headquarters of the Department of State, Jacobson received the top diplomat of Venezuela in the United States, as both countries withdrew their ambassadors in 2010.

US interested in maintaining high-level dialogue with Venezuela, El Universal

The United States has a “strong interest” to continue high-level contacts to bring relations with Venezuela back to normal, with the exchange of ambassadors among the main goals, said on Thursday the State Department. That was the message the Deputy Secretary of State for Latin America, Roberta Jacobson, conveyed on Tuesday during her meeting in Washington with Calixto Ortega, the Venezuelan chargé d’affaires, William Ostick, a US State Department spokesperson, told Efe.

Venezuelan Leader Nicolas Maduro Visits Haiti, ABC News

Venezuelan President Nicolas Maduro made his first official visit to Haiti on Tuesday as the countries began negotiations to figure out ways to renew a special fund that uses oil money on mostly infrastructure projects. Maduro and Haitian President Michel Martelly met privately for several hours on the grounds of where the National Palace stood before it collapsed in the 2010 earthquake. Venezuela is one of the biggest donors to help impoverished Haiti rebuild from the catastrophic 2010 earthquake.

Venezuela to ease foreign exchange regime: source, Reuters

Venezuela will make its foreign currency system more flexible by reviving a stalled dollar auction scheme in July and after that allowing a revival of a free-floating secondary currency mechanism, a source in the government’s economic team said on Sunday. Venezuela has operated currency controls for a decade, and restricted access to dollars at the official rate of 6.3 bolivars are a major gripe for local businesses and a cause of the OPEC member’s slowing growth rate.

Venezuela to Devalue Bolivar by Stealth: Analyst Survey, Bloomberg

Venezuela will look to weaken the Bolivar this year without making an official devaluation of the currency, as it tries to boost revenue and narrow the budget deficit, according to a survey of analysts. South America’s biggest crude producer will step back from formally devaluing the Bolivar for the sixth time in nine years, said eight out of 11 analysts surveyed by Bloomberg.

S&P Lowers Venezuela Ratings to ‘B’ from ‘B+’, Latin American Herald Tribune

Standard & Poor’s Ratings Services said on Monday it lowered its long-term foreign and local currency sovereign credit ratings on the Bolivarian Republic of Venezuela to ‘B’ from ‘B+’. The outlook on the long-term ratings is negative. At the same time, the agency affirmed its ‘B’ short-term foreign and local currency sovereign credit ratings on Venezuela. S&P also downgraded its transfer & convertibility (T&C) assessment to ‘B’ from ‘B+’.

Venezuelan government says recording proves opposition plots, Reuters

Venezuela’s government released a recording on Wednesday of a well-known opposition lawmaker apparently criticizing the head of the opposition coalition and accusing him of meeting U.S. officials to provoke a crisis in the OPEC nation. In the latest of a string of secretly-made recordings that have roiled politics in the South American country in recent months, the new tape was of female legislator Maria Corina Machado talking to a local academic.

Venezuela main purchaser of weapons in 2012, but Brazil has largest defence budget, Mercopress

The report said Venezuela imported some 1.2bn in 2012, surpassing Brazil, the country with the largest defence budget in the region. The document highlighted that the trend may continue even after the demise of former President Hugo Chávez. IHS Jane’s analyst Ben Moores said that Venezuela was halfway in its rearmament program and that it would be very costly to drop it. The US remains the top defence supplier in the region, with 758.52 million dollars in 2012. But Russia, particularly thanks to sales to Venezuela, stood behind the US with 730.8 million.

Journalists upset as Venezuela’s late president Hugo Chavez given posthumous journalism award, ABC

The decision “was unanimous” to grant the award “with extraordinary mention to the comandante president Hugo Chavez,” said the head of the awards jury, Milagros Perez. “The history and practice of journalism can only be divided in two moments – before and after comandante Chavez,” Mr Perez said. A journalists’ association cried foul, saying Chavez had made a habit of closing down media outlets.

Tal Cual: And Where Are Venezuela’s Most Corrupt Politicians?, Tal Cual

“Corruption is going to engulf our country,” claimed President Nicolás Maduro on Monday. Such grandiloquent phrase couldn’t have been said anywhere else but at Campo de Carabobo, in the northern central coast of the country, during the celebration of the 192th anniversary of Battle of Carabobo, a fight that led Venezuela to its independence. We are sure this is not the first time and, regretfully, will not be the last, either, that such a harangue against corruption is said on that venue.

 
Apr
4
2012
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ICYMI: Venezuela Credit Rating May Be Cut by Fitch on Oil Reliance

Bloomberg
April 4, 2012
By Daniel Cancel

Venezuela’s credit rating may be cut by Fitch Ratings, which cited higher spending, increased dependence on oil and the use of off-budget funds in reducing the outlook for the country to negative from stable.

A jump in government outlays may push the central government budget deficit to 6.8 percent of gross domestic product this year and make the South American country more vulnerable to a slump in commodities, Fitch director Erich Arispe said today in a statement. A drop in crude or gold prices could negatively affect the rating, he wrote.

Venezuelan President Hugo Chavez, who is receiving radiation therapy to treat cancer in Cuba and plans to seek re- election in October, has diverted at least $80 billion to off- budget development fund Fonden since it was created in 2005 and accelerated borrowing in U.S. dollars amid record crude prices. The 57-year-old also decreed a change to the public finance law on March 29 that allows him to issue debt beyond the budgeted amount without seeking congressional approval.

“A markedly expansionary fiscal policy and the transfer of the country’s oil-windfall to opaque off-budget funds have weakened Venezuela‘s external and fiscal credit metrics as well as increased its dependence on high oil prices,” Arispe said in the statement.

The yield on Venezuela’s 9.25 percent benchmark bonds due in 2027 rose 15 basis points, or 0.15 percentage points, to 10.98 percent today at 11:10 a.m. in Caracas, according to data compiled by Bloomberg. The bond’s price fell 0.99 cent to 87.25 cents on the dollar.

Rating Affirmed

Fitch affirmed it’s B+ credit rating for Venezuela, which is four levels below investment grade and in line with the ratings of Bolivia, Ghana, Kenya, Vietnam and Zambia.

Fitch also changed its outlook for Venezuelan state oil company Petroleos de Venezuela SA and government-run utility company Electricidad de Caracas to negative, according to a separate statement.

PDVSA, as the Caracas-based oil company is known, has about $19.5 billion of dollar bonds outstanding while the state utility has about $663 million of bonds due in 2014 and 2018, Fitch said in the statement.

Venezuela depends on oil for 95 percent of export revenue and about 66.7 percent of its international reserves were in gold at the end of 2011, Fitch said.

Borrowing Costs

While Venezuela’s debt-to-GDP ratio of 25.2 percent is lower than peers, interest payments are rising as the country sells more bonds at high borrowing costs, Fitch said. Venezuela sold $7.2 billion of bonds in 2011.

The extra yield that investors demand to hold Venezuelan debt instead of U.S. Treasuries widened 11 basis points to 943, according to JPMorgan Chase & Co.’s EMBI Global index.

Recent polls show Chavez maintains a lead on opposition candidate Henrique Capriles Radonski six months before the Oct. 7 election. Chavez has ruled Venezuela since 1999.

“The risk for political and social instability remains present due to the high concentration of power in the hands of the president, weak institutional framework and the high degree of political polarization in Venezuela,” Fitch wrote. “The likelihood of a close presidential election and concerns about President Chavez’s health add further uncertainty to the political environment.”

To contact the reporter on this story: Daniel Cancel in Caracas at [email protected]

To contact the editor responsible for this story: David Papadopoulos at [email protected]

To view this article on Bloomberg, please click here.

 
Sep
9
2011
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In Case You Missed It… Articles Roundup Week of 9/9/11

In this week’s roundup… The Unites States adds four top-ranking Venezuelan officials to its list of drug kingpins at the same time that new WikiLeaks cables reveal more ties between the Chávez government and drug trafficking; Irish cardboard maker, Smurfit Kappa Group Plc, will not be compensated for its confiscated land; Chavez’s gold repatriation could further hurt Venezuela’s credit rating; a new poll shows that the majority of Venezuelans disapprove of the Chávez administration’s performance as concerns about his health persist and 12-month inflation rate hits 25.8% through August in Venezuela.

U.S. Sanctions Venezuela Officials, Citing Drug Ties, The Wall Street Journal (By José de Córdoba)

The U.S. added a Venezuelan general, two legislators and a top intelligence official to a kingpins list for their alleged involvement in drug dealing and arms trafficking with Colombian guerrillas, the U.S. Treasury said Thursday.

Caracas Cables: Drug Trafficking Venezuelan Airline? Senator Dodd’s Meeting With Chávez; Wild West Border Region, The Huffington Post

For the past year or so, I’ve been writing steadily about WikiLeaks and U.S. diplomatic correspondence between various American embassies in Latin America and the State Department in Washington, D.C.

Venezuela Says Smurfit Kappa Won’t Be Compensated for Forestry Seizure, Bloomberg

Venezuela won’t compensate Smurfit Kappa Group Plc (SKG) for the seizure of 12,000 hectares of forestry plantations the Irish cardboard maker controlled in the South American country, Agriculture Minister Juan Carlos Loyo said.

ANALYSIS-Venezuela gold repatriation may hurt credit rating, Reuters via TD Waterhouse

Venezuelan President Hugo Chavez’s plan to repatriate the country’s external gold reserves could weaken its credit ratings, causing losses for bondholders while attracting a new wave of high-risk investors. The 57-year-old socialist leader announced last month he was nationalizing the country’s gold industry and bringing back some $11 billion in international bullion reserves that Venezuela holds in banks abroad.

Venezuela poll: Chavez’s popularity unchanged, The Associated Press via Forbes (Also posted on The Washington Post)

President Hugo Chavez’s approval ratings remain in the 50 percent range, but a majority of Venezuelans disapprove of the government’s performance on key issues such as crime, corruption and the economy, according to a poll released Wednesday.

UPDATE: Venezuela’s August CPI Up 2.2% On Month, The Wall Street Journal

12-month inflation rate hits 25.8% Through Last Month – Venezuela’s Inflation Rate Jumps 2.2% In August – Food Prices Continue to Drive Inflation

Chavez expects cancer recovery to stretch, AFP via Emirates 24/7

Venezuelan President Hugo Chavez on Wednesday said he would continue his cancer recovery through the end of this year but pledged to be fit and in form to run for reelection in the new year.