(Adds market reaction)
CARACAS Oct 6 Venezuelan state oil company
PDVSA said on Thursday
night it was extending the first deadline for a bond swap to
Oct. 12 from Oct. 6, adding that offers it had received were
below a key limit required for the operation.
"The consummation of the Exchange Offers is conditioned
upon, among other things, the valid tender of at least 50% of
the aggregate principal amount of the Existing Notes," PDVSA
said in an English-language statement.
"As of the Prior Early Tender Deadline, substantially less
than 50% of the aggregate principal amount of the Existing Notes
have been tendered."
PDVSA last month offered to swap $7.1 billion in outstanding
issues for a new bond, backed by its U.S. subsidiary Citgo
Holding Inc, to boost its cash-strapped coffers.
But the proposal drew market scepticism, so the
Caracas-based company late last month sweetened the terms,
offering more 2020 bonds in exchange for bonds maturing in 2017.
Bond prices went up after the improved offer, but sources in
the financial sector have said they could reverse course if the
planned bond swap fails due to low participation.
"Investors will have to participate because they are in a
kind of prisoner's dilemma in that if the swap isn't successful
no one will do well," said a local trader after news of the
PDVSA said in its statement on Thursday that the terms and
conditions of the offer remained intact, adding "there will be
no withdrawal rights for the remainder of the Exchange Offers."
A fund manager with PDVSA bonds said the later deadline
would likely increase participation. "Some people were left
out," he said.
The company has said it expected to pick up to 75 percent
of the total outstanding 2017 bonds, or a total of $5.325
billion, rather than the entire $7.1 billion.
Wall Street analysts estimate that PDVSA has already bought
back a considerable portion of its outstanding issues.
(Reporting by Corina Pons, Additional reporting by Alexandra
Ulmer; Editing by Shri Navaratnam)