UPDATE 4-S&P says PDVSA bond swap offer 'tantamount to default'

lunes 19 de septiembre de 2016 17:53 GYT

(Adds Fitch rating on new bond)

By Eyanir Chinea and Brian Ellsworth

CARACAS, Sept 19 (Reuters) - Credit ratings agency Standard & Poor's on Monday said Venezuelan state oil company PDVSA's proposed bond swap was a "distressed exchange" that would be "tantamount to default" if completed, a blow to the cash-strapped firm's effort to seek a financial lifeline.

The announcement will likely further fuel skepticism about the plan to ease PDVSA's $7.1 billion amortization burden in 2017 as it struggles to make ends meet under low oil prices and an unraveling economy.

PDVSA has nonetheless promised it will honor bond commitments no matter the fate of the swap, and investors broadly believe it will continue making debt payments despite triple-digit inflation, product shortages and a deep recession.

"We view the transaction as a distressed exchange," said Standard & Poor's, which downgraded PDVSA to CC from CCC. "The outlook is negative, reflecting a downgrade potential if the company completes the exchange offer, which we classify as tantamount to default."

PDVSA officials did not respond to an email seeking comment.

The company on Friday offered investors a new 2020 bond in exchange for the 2017N bond maturing in November 2017 and the 2017 bond maturing in April.

It said shares of its Citgo Holding Inc refining unit will be offered as collateral on the new bond.   Continuación...