The head of Venezuela’s state oil company PDVSA, Eulogio Del Pino, said a debt swap plan was ready and will be announced soon, as the cash-strapped company seeks financial respite.
“We have a plan that we’ll be announcing shortly for exchanging our debt,” Del Pino told local media late on Tuesday after a meeting.
“Only in what remains of the year, we have amortizations of $3.5 billion. That (swap) plan was already announced by a group not authorized to do so, but as soon as it came out in the media, we saw our country risk declining.”
The Caracas-based company did not immediately respond to a request for comment.
PDVSA bonds were up across the board on Wednesday. Its $3 billion 2017 bond maturing in April was up 2.2 points to a bid price of 67.40. The 2017N bond, which has a $2 billion amortization payment coming due in November, was up 1.97 points to bid 76.22.
Del Pino had said earlier this year PDVSA [PDVSA.UL] was in talks with international banks over refinancing.
Financial advisory firm Rothschild is approaching PDVSA bondholders in a bid to form a creditor group and draft a proposal for a voluntary swap of about $8 billion of the company’s short-term debt for notes with later maturities, IFR reported earlier this month, citing people with knowledge of the matter.
A debt swap could be a complex and potentially costly operation for PDVSA. The company would have to offer sweetened terms to bondholders to convince them of a swap amid a severe economic crisis that is devastating the OPEC country.
Del Pino said the debt proposal was “attractive,” adding that it was “very easy” to offer a debt swap.
The opposition-led National Assembly has warned President Nicolas Maduro’s socialist government it will not recognize public credit operations it has not authorized, potentially spooking bondholders who think the unpopular Maduro may be removed via a referendum.
Venezuela, which has the world’s biggest crude reserves, has also struggled with falling oil production this year, amid a cash crunch, shortages of spare parts and equipment, an energy crisis, and a brain drain.
“The fall of 220,000 barrels per day was a temporary issue due to electric problems and a problem with one of the upgraders, but that issue has been overcome,” he said, without offering specifics.
Del Pino also said the company was selling about $200 million to $250 million a month at the DICOM foreign exchange rate, which is currently about 640 bolivars per dollar.
PDVSA is also selling some $500 million to $600 million a month at the DIPRO rate of 10 bolivars per dollar, he said.