June 14, 2006
Pdvsa to issue USD 3.5 billion in debt

(El Universal) - "State-run oil holding Petróleos de Venezuela, S.A. (Pdvsa) is preparing to issue some USD 3.5 billion in debt bonds that could be available both in the domestic and foreign markets, financial sources said.

Pdvsa officers have met with European investment banks Deutsche Bank, UBS and Calyon, among others (...)

The holding is pondering several options for debt issuance in the domestic market, based on the same standards the Finance Ministry has used in several instances.

Pdvsa is therefore likely to issue USD-denominated bonds companies and particulars eager to buy US dollars amidst stringent exchange controls are to pay in Venezuelan bolivars (VEB).

In an internal report, Santander Investment explains that a significant part of the USD 3.5 billion debt issuance is to remain in Venezuela , giving growing excess liquidity in the country.

Research firm Ecoanalítica in a report branded that this likely debt issuance as positive, 'because it is taking place following a buyback of foreign debt that was highly expensive for the firm.' It added that 'if Pdvsa ultimately chooses to issue (this kind of bonds), it will be in a better financial position, compared to past debt issuance.' (...)".