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17.01.2014

Venezuelan bonds slump on ratings cut

CARACAS (Reuters) Venezuelan bonds tumbled on Wednesday following a ratings downgrade by Standard Poor that further fueled worries about the country capacity to uk canada goose outlet service debt amid soaring canada goose coats on sale inflation and economic contraction. Investors have become increasingly concerned about the country economy, which is widely canada goose store believed to have slipped into recession this year, and worry that President Nicolas Maduro is delaying reforms needed to shore up government finances.

The country benchmark Global 27 bond fell 3.3 percent, pushing its yield to 14.153. State oil company PDVSA benchmark bond maturing in November canada goose clearance sale 2017 fell 4.6 percent to bid canada goose coats 77.250 canada goose uk black friday with a yield of 23.087 percent.

S said Canada Goose online it cut Venezuela long term sovereign credit ratings to plus, pushing the country bonds into the deep trenches canada goose of junk status. The rating implies least a one in two likelihood of default over the next two years, S said.

solid oil revenue (estimated at US$82 billion for 2014) will continue to provide dollar inflows, the government could come under greater strain to service its rising level of external debt canada goose uk outlet maturities, it said.

The majority of emerging market sovereign credit ratings are below investment grade, with many Latin Canada Goose Outlet American countries in the lower levels of junk status.

Venezuela top business group, Fedecamaras, estimates the economy shrank 4 percent in the first canada goose uk shop semester as cheap canada canada goose outlet goose uk businesses struggled to Canada Goose Online import raw materials and machine parts because of a dollar shortage caused by canada goose clearance currency controls.

The central bank canada goose black friday sale has not published first quarter or second quarter GDP figures, and routinely delays the release of inflation figures, with the annualized https://www.gestiontb.ca rate buy canada goose jacket now topping 63 percent.

Industry associations say construction and manufacturing, both crucial to GDP expansion, have Canada Goose Jackets shrunk this year.

The overall index of Venezuela bonds as tracked by JPMorgan has tumbled 19 percent since July.

Maduro says the situation is the result of an war against his government that is led by opposition business leaders with the backing of Washington.

Economists Canada Goose Coats On Sale say restoring growth will require politically costly adjustments, including boosting heavily subsidized fuel prices and simplifying a uk canada goose three tiered exchange rate, both of which are likely to spur inflation.

Investors were disappointed that Canada Goose sale Maduro did not take advantage of a cabinet shakeup Canada Goose Parka this month to move on those measures.

The reshuffle instead moved Economy Vice canada goose factory sale President Rafael Ramirez to buy canada goose jacket cheap the foreign ministry, removing the government most prominent advocate for market based reforms.

Bondholders have also been alarmed by PDVSA plans to sell its refining unit in the United States, Citgo Petroleum and its stake in the Chalmette refinery.

PDVSA is also seeking to sell its stake canadian goose jacket in the Hovensa refinery in the Virgin Islands, cheap Canada Goose sources told Reuters on Wednesday.

Reporting by Brian Ellsworth in Caracas, Walker Simon and Daniel Bases in New York; Editing by Andrew Cawthorne, Andrew Hay, Andre Grenon and Peter Galloway.

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