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Venezuela to sell $3 billion debt

29 September 2009 07:53 (UTC +04:00)

Baku â€“ APA-Economics. Venezuela said on Monday it will issue $3 billion in dollar-denominated bonds maturing in 2019 and 2024 as President Hugo Chavezâ€™s government looks to temper demand for dollars and jump-start the economy, Reuters reported.
The offer opens on Tuesday and will close on Friday, with results of the sale, managed by Citibank (C.N) and Deutsche Bank, expected as early as Oct. 6.
The bonds are aimed at people living or residing in Venezuela and will be sold outside of the United States. Pricing will be determined during the auction, the central bank said.
The sale is among measures Venezuela is using to boost the rate at which its bolivar currency trades against the dollar on the countryâ€™s unofficial, parallel exchange market.
The 2019 bond issue is for $1.5 billion and will carry a 7.75 percent coupon. The 2024 issue will be for the same amount and take an 8.25 percent coupon, the central bank said.
Venezuela has said it is preparing a series of economic measures to help reduce its currency exchange divide and boost the economy after a second quarter contraction.
The bolivar has strengthened in recent weeks in the parallel market amid talk of a new debt issue in dollars.
Venezuela has strict foreign exchange controls that have tolerated an informal market for dollars, which now sell at more than twice the official rate VEFFIX= of 2.15 bolivars per greenback.
The rate gap is stoking already high inflation in the import-dependent economy as importers price products according to the black market rate.
Venezuelaâ€™s economy shrank 2.4 percent in the second quarter, the first time it contracted in more than five years, as lower oil income hit spending.
The government has previously allowed the local market to buy dollar-denominated bonds with bolivars, creating an alternative exchange rate to meet demand.