Venezuela in 'selective default': S&P

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Venezuela faced the first of what could be a cascade of defaults on its Dollars 150 billion foreign debt today as Standard and Poor's became the first credit agency to declare the crisis-torn South American country in "selective default".

The ratings agency said the South American nation had failed to make $200m (£153m) in repayments on its foreign debt.

"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".

The news came just hours after the government met investors in Caracas to try to renegotiate its debt.

S&P said in a statement late on Monday that Venezuela had failed to make $200 million in coupon payments for its global bonds due 2019 and 2024 within the 30-calendar-day grace period, due on Sunday.

"The government of the Bolivarian Republic of Venezuela wants to inform the world that today, at the Miraflores Government Palace, the process of refinancing Venezuela's foreign debt was started with resounding success, as a strategy to fully comply with our obligations", an official statement read.

But creditors who attended the meeting told journalists that the 25-minute meeting ended without the government making any concrete proposals.

Venezuela's debt crunch comes as no surprise, as the government cuts back on imports to service its debt, leaving the population struggling with shortages of food and medicine.

Vice-president El Aissami blamed United States sanctions for delays to Venezuela's debt repayments. And many creditors also can't negotiate with El Aissami: He, too, is sanctioned by the US Treasury, which accuses him of drug trafficking.

Restrictions include a ban on USA entities buying any new Venezuela debt issues - usually a required step in any restructuring.

"The positive climate in which this refinancing process began indicates that we will move forward and continue to build the welfare state that the people of Venezuela deserve", the official note added.

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