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http://www.zerohedge.com/news/2014-06-09/no-drinking-water-venezuela-until-bankers-get-paid-back
Venezuela, which imports just about everything, and its state oil producer have paid $2.8 billion in interest to overseas creditors this year, according to Barclays Plc. Including debt principal, bondholder outlays will balloon to almost $10 billion by year-end, the London-based firm estimates.
By putting off the local companies responsible for supplying everything from diapers to cancer medications, Maduro can preserve access to debt markets and protect oil shipments that would be vulnerable to bondholder seizure, said Alejandro Arreaza, an analyst at Barclays. Even if that means fanning the world’s fastest inflation and inflaming protests over shortages that have left at least 42 people dead since February.
“The government’s priority is to pay the sovereign debt,” Alejandro Arreaza, an analyst at Barclays Plc, said in a telephone interview from New York.
Of course, it's not just the government debt but state-owned entities that need the USD and are getting priority over the thirsty population...
State oil company Petroleos de Venezuela SA is seeking a loan to pay off $3 billion of debt that matures this year and isn’t planning additional dollar bond sales in 2014, a company official said yesterday. PDVSA, as the Caracas-based company is known, is working to refinance an additional $11.9 billion of dollar debt due through 2017 to bring its annual maturities to no more than $3 billion, said the official, who asked not to be identified because he isn’t authorized to speak publicly.
“It’s the first time that it’s ever reached this critical level,” he said by telephone. “And it’s clear that they can’t pay it off at once.”
Venezuela, which imports just about everything, and its state oil producer have paid $2.8 billion in interest to overseas creditors this year, according to Barclays Plc. Including debt principal, bondholder outlays will balloon to almost $10 billion by year-end, the London-based firm estimates.
By putting off the local companies responsible for supplying everything from diapers to cancer medications, Maduro can preserve access to debt markets and protect oil shipments that would be vulnerable to bondholder seizure, said Alejandro Arreaza, an analyst at Barclays. Even if that means fanning the world’s fastest inflation and inflaming protests over shortages that have left at least 42 people dead since February.
“The government’s priority is to pay the sovereign debt,” Alejandro Arreaza, an analyst at Barclays Plc, said in a telephone interview from New York.
Of course, it's not just the government debt but state-owned entities that need the USD and are getting priority over the thirsty population...
State oil company Petroleos de Venezuela SA is seeking a loan to pay off $3 billion of debt that matures this year and isn’t planning additional dollar bond sales in 2014, a company official said yesterday. PDVSA, as the Caracas-based company is known, is working to refinance an additional $11.9 billion of dollar debt due through 2017 to bring its annual maturities to no more than $3 billion, said the official, who asked not to be identified because he isn’t authorized to speak publicly.
“It’s the first time that it’s ever reached this critical level,” he said by telephone. “And it’s clear that they can’t pay it off at once.”