Venezuela congress sets terms for $1.25 bln debt

Reuters, 04.02.03, 3:25 PM ET

CARACAS, Venezuela, April 2 (Reuters) - Venezuela's National Assembly finance committee on Wednesday approved terms for up to $1.25 billion in domestic and external public bonds as the government sought to tap fresh capital after a two-month opposition strike drained oil revenues. About half of the total public credit involved of two trillion bolivars would be used to cover external and internal debt payments and the rest would go to cover the state's fiscal requirements for 2003, according to assembly legislators. Leftist President Hugo Chavez, whose government is facing a financial crunch after the December-January strike cut into its vital oil income, last week said that external debt payments would weigh heavily on this year's national budget. Government officials are working on a program to ease payments on the nation's $22.3 billion foreign debt through voluntary swaps, direct bank credits and external financing for specific projects. To manage its $9.04 billion domestic debt, the government has already started a restructuring program through voluntary exchanges to extend maturities. It has completed six swaps from November for about $2.76 billion in its maturing domestic National Public Debt (DPN) bonds. The issue approved on Wednesday carries six options, including DPN notes in the domestic market or Euro bonds, or bonds and global notes in dollars. The government already won approval in January to issue up to another two trillion bolivars under similar terms. The Finance Ministry proposed six different instruments depending on the conditions of the market at the time of issue and risk. Proposed terms included: *Eurobonds in euros with total payment on maturity, offering two options, one at 18 months with a yield of up to 10.7 percent and the another at up to seven to ten years with a yield of up to 12 percent. *In dollars. Bonds or global notes with a total payment on maturity and options of 18 months and 10 years and yields ranging from 14.8 percent and 17.65 percent. *In dollars. Bonds privately placed in the external market with a maturity of three years and a total payment on maturity. Priced at par. *In dollars. No precise instrument but the issue would have a maturity of up to 180 days with a yield of 14.74 percent. *In Yen. Bonds with a total payment on a four-and-a-half year maturity with a six-month Yen Libor rate plus a margin of no more than 525 basis points per year. Priced at par. *In bolivars. National Public Debt bonds through direct placement, swaps operations or the reopening of existing debt. ($1 = 1,600 bolivars)