Venezuela's PDVSA to hold tender offer for 7.33%, 7.9%, 8.03% bonds

By Angela McDaniels

Tacoma, Wash., Nov. 15 - Petroleos de Venezuela, SA (PDVSA) said it will consummate a tender offer for Cerro Negro Finance, Ltd.'s 7.33% bonds due 2009, 7.9% bonds due 2020 and 8.03% bonds due 2028 no later than Dec. 31.

The company will 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 company news release.

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.

By tendering their bonds, holders will be giving consent to waive any defaults or prospective defaults and to eliminate substantially all the restrictive covenants and events of default and the release of all collateral.

The tender offer will be 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.

PDVSA is Venezuela's state-owned oil company.

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