UPDATE 3-Venezuela's PDVSA offers $7 bln bond swap to ease debt burden
(Recasts with PDVSA confirmation)
By Ana Isabel Martinez and Corina Pons
MEXICO CITY/CARACAS, Sept 13 (Reuters) - Venezuela's state oil company PDVSA on Tuesday proposed a bond swap for $7 billion in outstanding debt to lower the financial burden on the cash-strapped company, which is at the center of the OPEC nation's unraveling socialist economy.
Reducing the hefty maturity payments due by the end of 2017 could help President Nicolas Maduro's government ease chronic shortages by making more dollars available to import goods ranging from rice to cancer medicine.
But investors may remain skeptical that the proposal does not address underlying problems with Venezuela's state-led socialist economy, such as dysfunctional state-run companies, rigid price controls and corruption-riddled currency controls.
"We had a peak of debt payments and we're kicking them forward," said PDVSA President Eulogio Del Pino in comments broadcast on state television. "We are seeking financial relief from the payment of these bonds."
Venezuela is reeling under low oil prices and a steady decay of its economic system. Inflation is in the triple digits, the economy is in a deep recession, and citizens routinely spend hours in line search of basic staple products.
Investors for months fretted that Venezuela was on its way to default, but have become more optimistic in recent weeks on signs the Maduro government will continue making payments despite adverse circumstances.
The swap operation offers a new bond maturing in 2020 in exchange for bonds coming due before 2017, Del Pino said. It will include amortization payments in 2017, 2018, 2019 and 2020. Continuación...