Jefferies markets PDVSA trade receivable notes
By Paul Kilby
NEW YORK, Aug 24 (IFR) - Jefferies is marketing trade receivable promissory notes from cash-strapped Venezuelan oil company PDVSA, three market sources told IFR on Wednesday.
The investment bank is sending out price indications of 35.00-50.00 on three series of 6.5% notes due 2019, with sizes of US$120m, US$200m and US$500m.
Reuters reported in May that PDVSA was looking to sell promissory notes to cover unpaid bills from its suppliers, and had hired Miami-based CP Capital to structure the notes.
"This is the first time I have seen someone trying to sell [this kind of paper]," one market strategist told IFR.
Two of the sources said Jefferies had indicated that it was talking directly to one of state-owned PDVSA's suppliers to provide the notes.
Jefferies declined to comment.
The deal is being marketed as having an attractive relative value against the curves of both PDVSA and the Venezuelan sovereign.
But some market participants are wary of purchasing securities that could be subordinated to senior debt in the event of a Venezuelan default.
"A lot of people are wondering if [the notes] are pari passu to bond debt," said the strategist. "If Venezuela goes belly-up, you need to know where you stand in the queue." (Reporting by Paul Kilby; Editing by Marc Carnegie)
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