Fitch says default at Venezuela's PDVSA probable

A default at PDVSA is probable as the Venezuelan oil company faces a weak liquidity position and relatively high amortization schedule in 2017, Fitch said in a report on Tuesday.

The state-own entity's EBITDA after royalties and social expenditures for the last 12 months ending June 2016 was negative, the rating agency calculated.

With a default probable, Fitch expects average recovery rates on the company's bond to be between 31%-50%.

"Should oil prices remain around current levels, average recovery may lead to additional future defaults to further reduce obligations and allow for necessary transfers to the government," said Lucas Aristizabal, a senior director at Fitch, said.