Thanks to a surprising cash injection in Venezuela's central bank, it now appears less likely that oil giant PdVSA will default on its payment to lenders next month. Since the decline in oil prices that began again in 2014 following a post-2008 crash recovery, Venezuela's central bank cash reserves declined an average of 40%. The decline coincided with the amortization payments of PdVSA, with the majority of those payments financed directly by PdVSA off balance sheet. The ratio of how PdVSA finances this payment will signal current and future cash flow dynamics in Venezuela, Morden says. There have been latent repayment risks after some selective coupon delays last November and consistently lower cash reserves in the central bank to pay the bills.

Source: Forbes March 28, 2017 16:44 UTC