PDVSA bonds drop on lawsuit, exchange

viernes 7 de octubre de 2016 15:54 GYT

By Paul Kilby and Davide Scigliuzzo

WASHINGTON, Oct 7 (IFR) - The fate of a debt swap from PDVSA was thrown in doubt on Friday after the Venezuelan oil company extended the deadline for the transaction and ConocoPhillips sued over the use of Citgo shares as collateral.

PDVSA bonds suffered a multiple point drop as investors expressed concern that a failure to extend maturities on short-term debt would bring the state-owned company closer to a restructuring.

"We could be back to square one with an intense redemption calendar that makes it hard for PDVSA to cover," an investor attending the IMF and World Bank meetings in Washington told IFR.

Intensifying the focus on the troubled oil exporting nation, Venezuela's central bank head Nelson Merentes was scheduled to attend a small gathering with investors organized by Deutsche Bank on Friday afternoon.

Venezuelan bonds opened several points lower on Friday, with the 2017 notes initially down five to six points and the rest of the curve opening three to four points weaker, according to one trader.

They later clawed back roughly half of their intraday losses on the expectation that PDVSA may have to improve the terms of the offer for the second time since the exchange was launched on September 16.

PDVSA's decision on Thursday to extend the early tender deadline of the swap to October 12 suggested to many that the company had received an underwhelming response to its offer, which targets US$7.1bn of bonds maturing in 2017.

"As of the prior early tender deadline, substantially less than 50% of the aggregate principal amount of the existing notes have been tendered," the company said Thursday.   Continuación...