continued guarantees that Venezuela will make payments on
its sovereign bonds in October, experts say a default or
restructuring process is inevitable.
The recent suggestion that the country was on the
verge of defaulting on its sovereign payments, having already
failed to make payments to domestic importers succeeded in
spooking investors at the beginning of September.
Assurances from the government - both that the
country will pay its foreign creditors and that it will not
sell the petroleum company Citgo, an important sizable asset for bondholders
- have helped to calm this reaction.
However, Venezuela’s situation remains
precarious. Creative alternatives for raising capital or
restructuring its bonds that the country has turned to in the
past, are dwindling as the government faces rising debt and a
public relations crisis.