UPDATE 2-PDVSA 2017s fall on disappointing debt swap terms

lunes 19 de septiembre de 2016 16:41 GYT

(ADDS downgrade, UPDATES levels)

By Paul Kilby

NEW YORK, Sept 19 (IFR) - The 2017s issued by Venezuelan oil company PDVSA were closing Monday off intra-day lows, even as investors shunned the terms of a debt exchange targeting US$7.1bn of those securities.

The 5.25% 2017s were ending the day at around 73.00 after hitting 71.75 earlier, while the 8.5% 2017s were back up to 77.30 after slumping to a 76.50 bid in the morning.

The 5.25% 2017s closed on Friday at 75.125, while the 8.5% 2017s ended last week at 79.40.

That followed S&P's announcement that it had downgraded PDVSA to CC from CCC, after calling the transaction a distressed exchange.

The rating agency warned it would lower the rating on the 2017s to D on completion of the operation, which it said would delay payments on the existing notes.

"We view the offer as distressed rather than purely opportunistic, given the current challenging operating conditions and the significant upcoming debt maturities that PDVSA faces," the ratings agency said.

PDVSA President Eulogio Del Pino said earlier this month that the new bond had been given a positive evaluation by three rating agencies.   Continuación...