Petroleos de Venezuela SA, the state oil company, will sell as much as $3 billion in 23-year bonds, ending a six-month halt in its sales of dollar-denominated debt.
The bonds will pay interest of 9.75 percent and will be sold in a private placement to Venezuela’s central bank and public lenders, according to a statement posted on the company’s website.
The oil producer known as PDVSA hasn’t sold dollar bonds since November, when it privately placed $2.4 billion of debt with the central bank. The company’s bonds rallied this year on speculation that President Hugo Chavez, who depends on PDVSA to finance his government, may not be fit to stand for re-election and that a new administration may reverse policies that have caused oil production to stagnate.
PDVSA will use proceeds from the bond sale to finance projects including social development programs, according to the statement.
Net income surged 42 percent to $4.5 billion in 2011 on $124 billion of revenue, the oil company said April 17. Total debt rose 40 percent last year to $34.9 billion after PDVSA sold $10.3 billion of dollar-denominated bonds to finance the development of new oil projects and government social programs.
PDVSA President Rafael Ramirez said last month that PDVSA’s debt levels are “comfortable” and that there’s room to borrow more in coming years amid efforts to tap heavy crude reserves in the Orinoco belt with private partners including Chevron Corp. (CVX:US), Eni SpA (ENI) and Repsol YPF SA.
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