UPDATE 2-Venezuela PDVSA sweetens bond swap terms after market skepticism
(Adds investor comment, details)
By Brian Ellsworth and Corina Pons
CARACAS, Sept 26 (Reuters) - Venezuelan state oil company PDVSA on Monday sweetened the terms of a bond swap proposal that had drawn market skepticism, offering more 2020 bonds in exchange for bonds maturing in 2017, part of an effort to improve the company's cash-flow situation.
PDVSA this month offered to swap $7.1 billion in outstanding issues for a new bond, backed by its U.S. subsidiary Citgo Holding Inc, at a one-to-one ratio, which some bondholders described as unattractive.
PDVSA will now offer an additional $170 in new 2020 bonds for each $1,000 in PDVSA 2017 bonds maturing in April and $220 for each $1,000 of PDVSA 2017N bonds maturing in November 2017, if investors participate before Oct. 6, the company said in a press release.
Investors participating after that date will receive an additional $120 for each $1,000 of the April maturity and $170 for each $1,000 of the November 2017 maturity.
The operation closes on Oct. 14.
"These conditions are very favorable for the swap," said Carmelo Haddad, Director of Knossos Asset Management, a fund that invests only in Venezuelan bonds.
"The market should react very well tomorrow. This may help (PDVSA) bring in the funds that have significant holdings." Continuación...