Venezuela planning benchmark global bond deal with proceeds to go to Argentina

By Paul A. Harris and Reshmi Basu

St. Louis, July 5 - The Bolivarian Republic of Venezuela is planning to place a benchmark-sized issue of global bonds, according to an informed source, who specified that proceeds from the deal will be shifted to the Republic of Argentina.

Credit Suisse will have the books, according to the source, who added that Venezuela apparently does not want the deal to be led by a U.S.-based bank.

Rumors had circulated that Morgan Stanley would be involved. However Morgan Stanley's status, in light of Venezuela's stipulation regarding U.S.-based banks, is unclear.

The notes are expected to come with an intermediate maturity - likely in the 10-year to 15-year range - where significant investor demand is focused, the source said.

Because the proceeds from the notes will be shifted to Argentina, it is not clear whether Venezuela's or Argentina's sovereign credit ratings will apply to the transaction, the source said.

It also remains to be determined whether the issue will be marketed via Rule 144A and/or Regulation S, the source said, adding that the securities are expected to ultimately be tailored to the needs of interested investors.

The source noted that a year ago Venezuela undertook to support Argentina's economy. This deal, although not directly related to that program, stems from the close economic ties that the two countries maintain.

© 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.