UPDATE 1-Venezuela's PDVSA says will honor all 2017 bonds if swap declined

domingo 18 de septiembre de 2016 16:01 GYT

(Adds lawmaker)

By Alexandra Ulmer

MARGARITA ISLAND, Venezuela, Sept 18 (Reuters) - Venezuela's state oil company PDVSA said on Sunday it would honor all 2017 bonds if a swap offer is not taken up, while reiterating that its proposal to swap up to $7.1 billion of debt was "attractive."

Caracas-based PDVSA on Friday made an offer to swap debt maturing next year for a new 2020 bond with a coupon of 8.5 percent in an effort to ease its heavy short-term payment schedule.

"This offer has very attractive returns," said PDVSA President Eulogio Del Pino during a summit of the Non-Aligned Movement on the Caribbean island of Margarita.

"The bond is paid in four years with four successive amortizations as of 2017. In addition, it is guaranteed by CITGO Holding Inc., giving confidence to those who decide to do the swap," he said in a statement, adding that PDVSA was prepared to meet its obligations regardless of the swap's success.

Markets have not yet had a chance to react to the proposal's fine print, but appetite may be muted.

The 2020 coupon of 8.5 percent would be identical to that of the November 2017 bond, although higher than the April 2017 bond's 5.25 percent coupon. There are also some legal worries the opposition-led National Assembly might oppose the deal because of its collateral.

"We're going to analyze it," said opposition lawmaker and economist Jose Guerra. "But we're not going to accept that (use of Citgo Holding)."   Continuación...