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Venezuelan Credit Dashboard: Default Risk Falls Below 50%

  • Investors decreased short-term default expectations to 44%
  • Odds of a credit event over the next five years are at 89%

Traders reduced their bets on a default of Venezuela’s dollar debt over the next year amid a thin repayment schedule in the first quarter.

The implied probability of nonpayment over the next 12 months plunged to 44 percent in January from 59 percent at the end of December, according to credit-default swaps data compiled by Bloomberg. That’s the first time the risk of default has been below 50 percent since September. The longer-term outlook is still a little murky, with the odds of a credit event over the next five years at 89 percent.