| CARACAS, April 7
CARACAS, April 7 Venezuela's central bank has
agreed to a repurchase agreement that would provide at least
$300 million from New York-based investment fund Fintech
Advisory Inc amid a cash crunch, two market sources and a source
close to the government told Reuters on Friday.
The crisis-wrought country has spent months negotiating with
investment banks, offering bonds as a guarantee, as it seeks to
boost liquidity ahead of steep debt payments that begin next
week, Reuters reported in February.
Venezuela's oil-dependent economy is suffering a brutal
recession that has millions of people skipping meals amid steep
inflation and low salaries.
Opposition lawmaker Rafael Guzman on Monday said the central
bank was negotiating with Fintech, run by financier David
Martinez, to obtain cash, using bonds issued by state oil
company PDVSA as guarantee.
Martinez is known for reaping big profits from bets on
distressed assets in countries including Argentina and his
native Mexico. This is the first known instance of him investing
"The operation has been approved," said a source close to
the government who had access to the deal's details and asked to
remain anonymous because he was not allowed to speak about it
The bank agreed to the transaction known as a "repo" using
around $1.3 billion in bonds held by the institution, the source
The central bank's board has already approved the operation,
according to two other sources in the finance sector.
Neither the central bank or Fintech Advisory responded to a
request for comment.
As PDVSA bonds are trading for up to less than half their
worth amid some market fears of a default down the road, the
central bank decided to seek private financing deals instead of
"This is the most viable and legal option they could take at
the moment," a Caracas-based trader added.
(Writing by Alexandra Ulmer; Editing by Chizu Nomiyama)