PDVSA Raises Debt Swap Exchange Offer, Sets $5.3 Billion LimitBy
Company wants to exchange bonds due in 2017 for 2020 debt
PDVSA to offer new bonds at higher price until Oct. 6
Venezuela’s state-owned oil company offered an improved deal to bondholders as it seeks to push back debt payments coming due this year and next.
Petroleos de Venezuela SA said it will pay investors as much as 1.22 times the face value of the notes they hold in exchange for longer-maturity securities, after offering no price premium in a proposal Sept. 16. While the original swap offer was for $7.1 billion of bonds, PDVSA said Monday it wouldn’t swap more than $5.325 billion of securities. The new bonds maturing in 2020 will continue to be backed by a stake in Citgo Holding Inc.
PDVSA is seeking to postpone debt payments after the collapse in oil prices and a decline in crude output hampered its ability to pay, putting the country of default watch for the past two years. The country has always managed to service its debts, even as foreign-currency reserves fell and its hard-currency drought led to shortages and protests.
“The offer is still less than what I would have expected to make this swap attractive enough to succeed,” said Russ Dallen, a managing partner at brokerage Caracas Capital.
The 1.22 times face value offer applies to $4.1 billion of notes due in November 2017. The $3 billion of securities that mature in April of that year would be exchanged at 1.17 times face value, according to a statement on the oil company’s website. PDVSA also said it was extending the early tender deadline to Oct. 6. D.F. King & Co. is the exchange agent for the deal.