Venezuela Debt Swap Details Revealed

“Petroleos de Venezuela (PdVSA), after months and days of delay, finally announced the terms of the debt exchange. The released terms were as expected including the $7.1 billion of the 2017 maturities with an 8.5% 2020 sinker in 4 equal installments at a 1:1 ratio and collateral with 51% of equity shares (first priority lien). The 2016 bonds were excluded from the transaction (rollover risk low on high ownership among public entities) and there is an early tender deadline on September 29 and an expiration date of October 14 (less than 1:1 exchange ratio). The conditions of the exchange offer require an aggregate 50% participation of the principal amount of the outstanding bonds and “certain conditions that we may assert or waive” such as legal challenges, delays or limitations.” … The 50% minimum threshold will prove challenging without the participation from non-resident bondholders ….”More…