Investors in Venezuela's $5 billion of bonds maturing in 2019 and 2024 can organize to demand that the nation immediately pay back all they're owed, and down the line, holders of the nation's other bonds, which have cross-default provisions, could choose to do the same.
News on Friday that a state-owned utility, Electricidad de Venezuela, failed to make a $650 million payment within a one-month grace period bolstered creditors' wariness that a default was unfolding.
S&P said it had lowered Venezuela's long-term foreign currency rating to "SD", and cut its long- and short-term foreign currency sovereign credit ratings on the Bolivarian Republic of Venezuela to "SD/D" from 'CC/C.
But with his country's hard-currency reserves now whittled down to less than $10 billion, his options are very limited.
Yesterday the socialist government offered the sweet treats during a brief meeting in Caracas but left investors without a clear understanding of the government's strategy to renegotiate $60 billion in debt.
The agency says "there is a one-in-two chance that Venezuela could default again within the next three months".
Industry body ISDA said it would reconvene on Tuesday to discuss whether PDVSA had triggered a credit default event through a late payment of its 2017N bonds.
Tightening the squeeze on Maduro was the European Union's announcement of sanctions, including an embargo on arms and equipment that could be used for political repression. Restrictions include a prohibition on USA entities buying any new Venezuela debt issues - usually a required step in any restructuring.
Late Sunday, Maduro struck a defiant tone, insisting that his country would "never" default and pointing to ongoing negotiations with China and Russian Federation.
"As the Venezuelan economy continues to crumble, the situation will likely only worsen especially as the country is at risk of defaulting on its debt", the United States delegation said in a document calling the meeting.
A default can be declared in several ways: by the major ratings agencies, big debt-holders, or by the government itself.
As rough as the ride has been regarding debt, Maduro is also being buffeted by worldwide accusations that he is acting as an autocrat - stomping on democracy by marginalising the opposition, which controls the parliament, and stifling independent media.