I am sorry to report that as of this morning, this $185 million interest payment that was due on September 15 has still not been received by bondholders. Our inquiries to ONCP have received conflicting and confusing answers, but basically the conclusion we have been able to draw is that this $185 million interest payment on $4 billion of the oldest of Venezuela's bonds (issued pre-Chavez and re-tapped by Chavez) has not been paid as of Wednesday, September 20.

On Friday, September 15, we texted this out to our VIP clients:

"Look it doesn't mean anything yet, but we watch the Venezuela reserves and we usually expect to see them pull out an amount of money that corresponds to the debt they are paying. For the last year or so they have been pulling out the money very late on average. Under that scenario, we had expected to see Venezuela pull out $185 million to pay the coupon on the $4 billion Venz 9.25% of 10/15/27 due today. That didn't happen as of yesterday's reserves (which we get a day later). It is possible that they took them out early last week, which would have been uncharacteristially prudent given their US dollar banking problems. They did take out $140mm on Sept 5 and $36mm on Sept 6 and $19mm on Sept 12. Gold Reserve has confirmed that they received their $29.5mm that was due on the 10th, which bodes well for them paying the coupon due today, but we have also not seen any message of payment from Venezuela's Office of National Public Credit."

I am sorry to report that as of this morning, this $185 million interest payment that was due on September 15 has still not been received by bondholders.  Our inquiries to ONCP have received conflicting and confusing answers, but basically the conclusion we have been able to draw is that this $185 million interest payment on $4 billion of the oldest of Venezuela's bonds (issued pre-Chavez and re-tapped by Chavez) has not been paid as of Wednesday, September 20.

According to the terms of the 2027 Bond Prospectus, if the non-payment continues for 30 days, this failure becomes a full-blown "event of default," allowing for acceleration and cross-defaults.

Please don't hesitate to contact us for more information.