Thursday, October 06, 2016

PDVSA eyes $4.7 billion debt issue to pay service companies

Venezuelan state oil company PDVSA is seeking to issue up to $4.7 billion in debt securities to settle unpaid bills to contractors, according to a document seen by Reuters, as the cash-strapped firm scrambles to cope with low oil prices.

The proposal signals PDVSA's increasing reliance on complex financial engineering to make ends meet after a slump in crude output and a severely depressed economy left it struggling to tap cheaper and more traditional forms of credit.

The quiet issuance of securities known as promissory notes could dampen a recent surge in investor confidence that PDVSA would avoid default through a $5.3 billion bond swap plan that is meant to help ease its payment burden in the coming months ....