Venezuela faced the first of what could be a cascade of defaults on its $150-billion foreign debt Tuesday as Standard and Poor's declared the crisis-torn South American country in "selective default".
S&P's move came after Vice President Tareck El Aissami met with creditors in Caracas Monday, but offered no way out of the impasse.
In the meantime, China said its massive financing of Venezuela was "proceeding normally", and Russia was expected to sign an agreement as early as Wednesday to restructure $3 billion of Caracas's debt, according to sources in Moscow familiar with the matter.
Beijing and Moscow have emerged as Venezuela's most reliable sources of funding, with China owed $28 billion and Russia $8 billion.
S&P declared Venezuela in "selective default" after it failed to make $200 million in payments on two global bond issues by the end of a 30-day grace period on November 12.
"We have lowered two issue ratings to 'D' (default), and we lowered the long-term foreign currency sovereign credit rating to 'SD' (selective default)," the agency said, adding that $420 million in payments on four other bonds were also overdue, but still within the grace period.
Venezuela's debt crunch comes as no surprise, as the government cuts back on imports to service its debt, leaving the population struggling with shortages of food and medicine.
Caracas has less than $10 billion left in hard currency reserves, but must make $1.4 billion in debt payments before year-end, and another $8 billion next year.
President Nicolas Maduro has formed a commission to restructure Venezuela's sovereign debt and that of state oil company PDVSA.
But participants in a first meeting in Caracas on Monday said officials had come up with no concrete proposals for restructuring the debt.
"They didn't give any concrete details on their plans, on what they hope to get," Geronimo Mansutti, from the Rendivalores brokerage, told AFP.
About 70 percent of Venezuelan bondholders are North American, according to government figures.
S&P said there was "a one-in-two chance that Venezuela could default again within the next three months."
"We would very likely consider any Venezuelan restructuring to be a distressed debt exchange and equivalent to default given the highly constrained external liquidity," it said.