Wall Street Is Watching These Hotspots After Venezuela Default
- South American country declared in default by rating companies
- Next-riskiest nations include Lebanon, Ecuador and Ukraine
Venezuela in Default After Missing Debt Payments
After Venezuela was declared in default by credit-rating companies this week, emerging-market money managers are looking to identify countries that might run into trouble down the road.
None are nearly as badly off as Venezuela, where a combination of low oil prices, economic mismanagement and U.S. sanctions did the country in. Five-year credit-default swap spreads there stand at almost 17,000 basis points, compared with 600 for its closest peer. Still, traders are scouting for credit risk, from Lebanon, where Prime Minister Saad Hariri’s sudden resignation has once again thrust the nation into a Saudi-Iran proxy war, to Ecuador, where recently elected President Lenin Moreno continues to expand the debt load in a country with a history as a serial defaulter.