Venezuela's PDVSA gets needed consents for Cerro Negro's 7.33%, 7.9%, 8.03% bonds

By Jennifer Chiou

New York, Dec. 20 - Petroleos de Venezuela, SA (PDVSA) said it obtained tenders from holders of more than 90% of Cerro Negro Finance, Ltd.'s $82 million of 7.33% bonds due 2009, $350 million of 7.9% bonds due 2020 and $50 million of 8.03% bonds due 2028.

PDVSA received enough consents to waive any defaults or prospective defaults and to eliminate substantially all the restrictive covenants and events of default and allow the release of all collateral.

The offer ends at midnight ET on Dec. 27. Plans for the tender were announced on Nov. 15. It began on Nov. 30.

For each $1,000 principal amount, the company said it will determine the payouts using the 4.75% Treasury due Feb. 28, 2009 and a fixed spread of 30 basis points for the 7.33% bonds; the 4.25% Treasury due Nov. 15, 2017 and 50 bps for the 7.9% bonds; and the 5% Treasury due May 15, 2037 and 50 bps for the 8.03% bonds.

Previously, the company said it would pay par plus accrued interest and an amount equal to 33% of the redemption premium as calculated under the bond indentures.

The bonds were issued in connection with the Cerro Negro extra-heavy crude oil project in the Orinoco Belt region, according to a previous company news release.

As already reported, the tender offer is being held in connection with a lock-up agreement PDVSA reached with holders of 79% of the bonds. Under the agreement, the holders will tender all of their bonds and will not take any action that interferes with the operation of the Cerro Negro project, including the exercise of any rights or remedies.

The tender offer was conditioned on the receipt of tenders for at least 75% of the bonds.

If the tender offer is not consummated by Dec. 31, the company said it will purchase the bonds directly from the lock-up agreement participants, who account for more than 79% of the bonds.

Lazard Freres & Co. LLC is the dealer manager and solicitation agent (call collect 312 407-6674). Global Bondholder Services Corp. is the information agent (call collect 212 430-3774 or 866 470-3700).

PDVSA is Venezuela's state-owned oil company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.