Venezuela swaps $32 mln in maturing local debt

www.forbes.com Reuters, 02.13.03, 5:43 PM ET CARACAS, Venezuela, Feb 13 (Reuters) - Venezuela's government, struggling with a drastic slide in oil revenues, pushed back maturities on about 30 percent of local bonds due Feb 17 with a debt swap on Thursday worth about $32 million, the Central Bank said. The bank said it exchanged 51.8 billion bolivares in bonds for four other debt issues, maturing between five and just over eleven months away. Supply far outstripped demand for the 200 billion bolivares ($125 million) in bonds on offer. Dollar conversions on the bolivar-denominated notes are based on the government's new fixed exchange rate of 1,600 bolivars to the dollar. Venezuela's debt swap is part of emergency measures adopted by the government to cope with the economic crisis after a two-month opposition strike slashed the vital oil exports that account for half of state revenues. Opponents of leftist President Hugo Chavez started a general strike Dec. 2 to press him into elections to end their bitter feud. While the strike has fizzled, it has disrupted oil output and shipments from the world's No. 5 petroleum exporter. The debt auction follows six previous exchanges by the Finance Ministry to ease a crunch in domestic payments during 2003 and the next two years when most of the nation's $8.75 billion in total internal debt matures. The government has said that it has sufficient resources to complete its obligations and said it will take the necessary measures to guarantee payments as oil production starts to recover. Officials have also guaranteed payments on the government's $20 billion in foreign debt. As part of its economic counter measures the government has cut its spending by 10 percent and introduced an austerity program, which includes tight currency controls and pricing curbs on basic products. From the end of last year the government has conducted a reorganization program in its internal debt, including a swap of more than $2 billion in its National Public Debt that came due between December last year and June 2005. Those notes were swapped for debt due between one and five years later.