| CARACAS, June 6
CARACAS, June 6 A Venezuelan state-owned bank is
offering $5 billion worth of sovereign bonds maturing in 2036 at
a discount of up to 80 percent to several Wall Street funds,
according to a lawmaker and a finance industry source.
The move is part of the embattled socialist government's
strategy to raise fresh funds to support the crisis-stricken
economy by selling bonds, gold and shares in oil projects.
A potential deal, coming on the back of a controversial sale
of state oil company bonds to Goldman Sachs last month, would
likely heighten opposition criticism that Wall Street is handing
President Nicolas Maduro a lifeline amid a bruising economic
crisis and major anti-government protests.
The sovereign debt securities, held by state-owned Banco de
Venezuela since their issuance in late 2016, were offered in
early May to Goldman Sachs, but the U.S. bank rejected the deal,
financial sources told Reuters.
"Now they are being offered to funds in New York, instead of
to large banks, with a discount of up to 80 percent," said
opposition lawmaker Angel Alvarado, who tracks the negotiations
between Nicolas Maduro's administration and Wall Street and was
informed of the offer by sources in New York.
"They're still holding fire sales," he added, criticizing
the potential deal with Maduro's cash-strapped administration.
Opposition lawmakers, economists and lawyers have campaigned
to cut off financing for Maduro, sending letters to the heads of
13 major banks and flagging the reputational risk of working
But in May, Goldman Sachs and Nomura bought some $2.9
billion in bonds from Venezuelan state oil company PDVSA, via
intermediaries, and at a discount of up to 70 percent, the U.S.
bank and sources close to the Japanese bank said.
Banco de Venezuela is also seeking to sell its bonds through
intermediaries, including Hong Kong-based Haitong Securities,
which coordinated the physical issuance of the bonds in 2016, a
New York-based financial source familiar with offers said.
"Bonds similar to 2036 are in the market with (a price of)
between 35 and 38 percent (of their original price)," said the
source familiar with the talks. "But they are offering them at a
20 percent because the securities have not been dematerialized
and require a bank with the infrastructure for that process."
Several analysts and traders believe that Venezuela has not
been able to sell the bonds so far because they were issued
physically and cannot be traded electronically.
Banco de Venezuela and Haitong Securities did not
immediately respond to a request for information from Reuters.
In a potential worry hovering over these deals, White House
officials told Reuters this month that the Trump administration
is concerned about any action by U.S. companies that provides a
financial boost to Venezuela's government.
(Reporting by Corina Pons; Writing by Alexandra Ulmer; Editing
by Cynthia Osterman)