Venezuela expected to bring $1.5 billion equivalent debt offering in early August

By Paul A. Harris

St. Louis, July 28 - The government of Venezuela plans to address an excess of liquidity in its financial system with new debt issuance in the coming 10 days amounting to $1.5 billion equivalent, according market sources.

One source told Prospect News on Thursday that a local bolivar-denominated issue is the most likely scenario.

The source said that the government, in this scenario, could be expected to offer a mixture of bonds with different yields and maturities.

The mix would likely include indexed bonds pegged to the official exchange rate of 2.15 bolivars to the dollar, the source added.

ABN Amro and Calyon Securities are expected to be involved.

The source said that the government believes the issuance will help to drain liquidity from Venezuela's financial system which has been increasing in spite of the central bank's tighter monetary policy.

Further liquidity is expected when money from social spending programs initiated by President Hugo Chavez starts to work its way into the system, the source added.

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