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Venezuela's PDVSA calls ratings agencies 'professional speculators'

Published 09/20/2016, 06:13 PM
Updated 09/20/2016, 06:40 PM
© Reuters. The logo of the Venezuelan state oil company PDVSA is seen at a gas station in Caracas

CARACAS (Reuters) - The president of Venezuelan state oil company PDVSA on Tuesday slammed ratings agencies as "professional speculators" who were contributing to a negative reception of a $7.1 billion bond swap proposal meant to improve the company's finances.

Standard & Poor's on Monday said PDVSA's swap plan was "tantamount to default" if carried out, while Fitch Ratings said PDVSA's 2020 bond to be issued as part of the swap had a "real possibility of default."

"Speculators are trying to generate a climate of tension so that (bondholders) will get rid of their bonds at a lower price," said Del Pino in a radio interview. "These ratings agencies are always playing this game, they always have, they're professional speculators."

S&P and Fitch did not immediately respond to emails seeking comment.

PDVSA is offering investors a new 2020 bond in exchange for the 2017N bond maturing in November 2017 and the 2017 bond maturing in April, with shares of its Citgo Holding Inc, the owner of PDVSA's U.S. refining unit Citgo, serving as collateral on the new bond.

Wall Street analysts have expressed concern that the operation is not sufficiently attractive to convince bondholders to join a swap operation.

Del Pino said the plan had been subjected to a "smear campaign"

Socialist-led Venezuela frequently accuses Wall Street and businesses of seeking to sabotage its leftist administration.

"What we're seeing is a political war against our country, against our operation, trying to grind our operation into the ground," said Del Pino, urging bondholders to "carefully evaluate what we are offering you."

PDVSA says it will continue to make payments on outstanding bonds even if investors turn down the swap offer.

Despite market concerns earlier this year that PDVSA could default, investors broadly believe that PDVSA and Venezuela will continue servicing debt to avoid being cut off from the international financial system.

© Reuters. The logo of the Venezuelan state oil company PDVSA is seen at a gas station in Caracas

President Nicolas Maduro dismisses default talk as a campaign by adversaries seeking to weaken his government.

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