Vincent Basulto comments on PDVSA's credit determination question on unpaid bond maturity with REDD

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November 8, 2017

PDVSA, Venezuela's state oil company, may have its credit default swaps triggered now that a credit event determination question has been submitted to the International Swaps and Derivatives Association (ISDA). The question submitted to the credit derivatives determinations committee asked whether a “failure to pay” event had occurred, based on the possibility that a three-day CDS grace period had expired on its so-called 2017N bonds without payment being received.

RK&O partner Vincent Basulto discusses in REDD that PDVSA's situation is, "Reputationally it’s not desirable... But in these circumstances that’s probably not that big a concern. The reference entity, [PDVSA], isn’t a party to the contract.” 

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