Its grade was cut to C, the lowest possible level, by Moody’s Investors Service, which said bond investors should gird themselves for large losses.

The country and its state-owned oil company are already behind on US$1.7 billion of payments, and there’s little hope the government will be able to reach a restructuring agreement amid US sanctions that forbid investors from purchasing any new Venezuelan securities, Moody’s said.

The change is a formality — investors have already seemed to resign themselves to waiting for a change in government or another development that causes a resumption in payments.

Eventual losses to bondholders will likely exceed 65%, Jaime Reusche, a senior credit officer at Moody’s, wrote in the report.

No other country shares Venezuela’s C grade.

“The continuing erosion of Venezuela’s payment capacity will lead to heavy losses to bondholders, with ongoing defaults on interest payments on various bonds compounded by upcoming principal maturities,” Reusche wrote.

“The country’s large external funding gap and diminishing financing sources imply that upcoming debt service payments will continue to be missed.”