Venezuela's President Nicolas Maduro talks to the media during a news conference at Miraflores Palace in Caracas, Venezuela October 17, 2017.

Venezuela's Electricidad de Caracas — a state-owned electric company — has defaulted on a $650 million bond payment, Wilmington Trust said Friday.

The bonds mature in 2018 and yield 8.5 percent. Electricidad de Caracas was already a month late on its payment before the trustee, Wilmington Trust, issued its statement.

"The is the first official announcement of a default" in Venezuela, said Russ Dallen, managing partner at Caracas Capital. "This was the canary in the coal mine to tell if the air is bad."

The default comes as the International Swaps and Derivatives Association (ISDA) prepares to decide next Monday whether state-run oil giant Petroleos de Venezuela (PDVSA) experienced a credit event earlier this month.

PDVSA missed a $1.12 billion bond payment on Nov. 2. If ISDA decides that PDVSA did experience a credit event, that could lead bondholders to declare a default, which could trigger an avalanche.

"We expect if holders do declare a default then that could be used to trigger cross default across the whole US$28bn of PDVSA bonds," Stuart Culverhouse, chief economist at Exotix Capital, said in a note. He noted, however, that bondholders "may simply give the government more time to make the payment, as the intention seems to be there, but coordinating a large group of holders with different incentives could prove challenging."

The Venezuelan government has said it will make its PDVSA payment, but questions about the willingness of President Nicolas Maduro's regime to pay have been raised after he announced a plan to restructure Venezuela's massive debt.

"On Monday, we'll know if this is a default and we'll get a better idea of what Venezuela's strategy here is," said Dallen of Caracas Capital.