Venezuela plans foreign bond issue, debt buybacks

[Judi Lynn]

Venezuela plans foreign bond issue, debt buybacks
Sun Jan 22, 2006 3:03 PM ET

LA PAZ, Bolivia, Jan 22 (Reuters) - Venezuela plans a new foreign bond issue in the first quarter of this year as the government studies buying back part of its external debt, Finance Minister Nelson Merentes said on Sunday.

Venezuela, the world's No. 5 oil exporter, four years ago began a broad bond refinancing program to better its public debt profile. The government last went to the international markets in November with a sale of $3 billion in Eurobonds.

"Within a few weeks I will be traveling to Europe to analyze how the markets are over there. We plan to issue foreign debt in the first quarter of this year," Merentes told Reuters in Bolivia where he attended the swearing-in ceremony for the country's new president.

Merentes said that the government still had to define what type of debt would be offered to investors and the amount of the operation. He said the government was still studying possible debt repurchases
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http://today.reuters.com/investing/financeArticle.aspx?type=economicNews&storyID=2006-01-22T200238Z_01_N22241914_RTRIDST_0_ECONOMY-VENEZUELA-BONDS.XML

[Kagemusha]

1. What happens when bondholders don't want to be bought out?

No, seriously. I've studied just enough economics to wonder about this issue. I've always been curious what would happen if a Latin American country somehow was able to attack its deficits and work on wiping out debt... I know Argentina's waged economic war by defaulting but, Venezuela's been blessed with an oil boom allowing it to look at buying out debt. But can it?

[Tempest]

2. Bondholders will have no choice

All bonds are written with early retirement clauses built in.