I’m seeing conflicting reports: Venezuela defaulted, Venezuela didn’t default, Venezuela is about to default.

What’s the truth? Venezuela ALMOST defaulted, but Russia came in at the last second to restructure the $3 billion debt the socialist country owes Russia.

S&P Global Ratings said on Monday that Venezuela defaulted after it missed a debt payment. But that all changed on Wednesday. From The Wall Street Journal:

“Reducing the debt burden to the republic from the restructuring of liabilities will allow the funds that have been freed up to be allocated to the country’s economic development, to improve the liquidity of the debtor, and to increase the chances of all creditors to recoup credits provided to Venezuela,” the Russian finance ministry said in a statement.

The agreement comes just as Venezuela’s cash-strapped government teeters on the edge of a default on some $150 billion in outstanding debt. Struggling with a crumbling state-led economic model, President Nicolás Maduro’s administration is seeking to renegotiate payment terms with its creditors in an effort to free up import dollars needed to resolve chronic shortages of food and medicine.

“Venezuela is advancing toward the recomposition of its external debt, to the benefit of its people,” Mr. Maduro’s top economic adviser, Simon Zerpa, said in a Twitter post, lauding the deal with Russia.

PdVSA, Venezuela’s state owned oil and natural gas company, claims “it made an interest payment on a bond that matures in 2027.” The government said it has also mailed the coupon payments for the 2019 and 2024 bonds.

Forbes reported that Venezuelan bond holders “received principal payments on PDVSA 2017s and 2020s” bonds. Another person said that on Sunday, Russia saved him “with support for his position in PDVSA 2020 bonds.”

These moves have saved Venezuela…for now. Forbes continued:

The Emerging Markets Trade Association — a group of emerging market specialist banks and traders — agreed on Wednesday to continue trading bonds with accrued interest instead of flat. Investmen firms trade bonds flat typically if bonds are in default, and trade bonds based on interest payments due if bonds are believed to be paid at some point. In other words, the market thinks Venezuela will service its debts, though risks remain.

At this point, bond holders have not agreed to call the bonds, nor accelerate, a term used in the market to mean that the key lenders to PDVSA and the sovereign have agreed to demand immediate payment of principal. That is the key thing to watch for. The rating agency downgrades and jumps in prices on Venezuela’s credit default swaps have not been accurate indicators to gauge a true Venezuela default.

IF Venezuela defaults (and I seriously doubt Russia would allow that to happen…then the Kremlin would lose control of the oil rich nation) it could cause even more problems in the socialist country that is already suffering a humanitarian crisis.

PdVSA is the ONLY lifeline left in Venezuela. The oil in the country is the one thing that has kept it afloat. If the country defaults then investors could “seize the country’s assets — primarily barrels of oil – outside its borders.”

Without this income, everything would go to the last level of Hell. As it is with the oil, Venezuela is broke and people have no access to food or proper medical treatment. Officials can blame U.S. sanctions all they want, but socialism caused this. From CNN Money:

It fixed — or froze — prices on everything from a cup of coffee to a tank of gas in an effort to make goods more affordable for the masses. For years, Venezuelan leaders also fixed the exchange rate for their currency, the bolivar.

Those moves were among the driving forces behind the food shortages. Farmers couldn’t sell at low prices without going out of business because their cost of production was much higher. Importers also couldn’t afford to ship in food, knowing they would have to sell at much lower prices than what they paid for at the port.

When food shortages grew worse, an illegal black market emerged where venders sold basic foods at vastly higher prices than the government’s artificially low prices. Inflation soared, making the bolivar almost worthless.