Pdvsa confirms debt bond issue to pay domestic obligations

Financial sources suggest that the issuance will amount to USD 3 billion and the papers will be due in two years (File Photo)

Economy
Rafael Ramírez, the Venezuelan Minister of Energy and Petroleum and president of the state-run oil company Petróleos de Venezuela (Pdvsa), said that the holding is preparing a debt bond issuance. The proceeds will be used to pay outstanding bills.

The official added said that "the issue will be denominated in Venezuelan bolivars and is earmarked to pay domestic obligations." The domestic obligations of the state-run oil company with suppliers amounted to USD 7.5 billion at the end of 2008.

Ramírez said, following a ministerial meeting at the Sixth Summit of the Bolivarian Alternative for the Peoples of Our America (ALBA), held in the city of Maracay, central Venezuela, that "Pdvsa is not issuing papers on its own, since we depend on the coordination of other ministries."

Meanwhile, Finance Minister Alí Rodríguez confirmed that the "issue has been approved by the Executive Office and the Central Bank of Venezuela," AFP reported.

The two ministers refused to elaborate on the financial terms of the papers.

Financial sources suggest that the issuance will amount to USD 3 billion and the papers will be due in two years. The financial operation would be made with banks and brokerage firms.

On the other hand, the Minister of Basic Industries and Mines, Rodolfo Sanz, told Bloomberg that the Venezuelan Guayana Corporation (CVG) is considering the sale of bonds. He did not provide further details. Official sources have said that gold would be used as collateral of the papers to be issued by the CVG. The Ministry of Finance is assessing the operation.

http://english.eluniversal.com/2009/06/25/en_eco_esp_pdvsa-confirms-debt_25A2414203.shtml