Venezuela's PDVSA eyes $2.5 bln debt issue to pay service firms: documents
By Brian Ellsworth and Corina Pons
CARACAS May 23 (Reuters) - Venezuelan state oil company PDVSA is preparing to issue $2.5 billion in promissory notes to settle unpaid bills to services companies, according to industry sources and documents seen by Reuters.
PDVSA has already issued at least $310 million in debt securities as part of a broader effort to prevent crucial oil services providers from downing their tools for lack of payment, Reuters reported this month.
The company has hired little-known, Miami-based financial services firm CP Capital to structure 3-year notes with a one-year grace period that will have the same status as PDVSA's global bonds, according to documents obtained by Reuters.
The operation creates additional financial obligations for a company already facing doubts about its capacity to meet ballooning bond payments amid low oil prices, a collapsing socialist economy, and chronic shortages reminiscent of the Soviet bloc.
President Nicolas Maduro said any talk of default is part of an international campaign to undermine his government and points out that the ruling Socialist Party has never missed a bond payment.
"CP Capital has been hired to advise PDVSA on the exchange of commercial invoices for financial debt with a minimum amount of $2.5 billion," read a PDVSA document seen by Reuters.
"PDVSA will issue unsecured debt with the same risk levels as PDVSA's other publicly traded notes and obligations," read the document, adding that CP Capital will work with providers to help them get paid for outstanding bills.
PDVSA's board of directors approved the operation in April, according to a separate PDVSA memorandum. Continuación...