Venezuela to complete buyback of bonds

Associated Press

CARACAS, Venezuela - Venezuela plans to complete its buyback of $3.9 billion in bonds by the end of May as the world's fifth-largest exporter attempts to reduce its public debt amid high oil prices, officials said Monday.

Venezuela announced its plan to repurchase Brady bonds in late February as part of an aggressive strategy to ease its debt load.

"By May 31 we must have completed the Brady bond repurchase," Rudolf Romer, head of the public credit office at the Finance Ministry, said without elaborating.

May 31 is when interest rates are due on a portion of the bonds and the last day to complete the debt purchase, according to ministry officials.

Earlier this month, the government said it had completed 75 percent of the planned buyback.

Venezuela is using its surging oil revenue to reduce its public debt. President Hugo Chavez says such debt often benefits rich creditors while saddling poorer countries with crippling interest payments.

The government has said it will pay off this year roughly 15 percent of its debt, or $4.75 billion, including debts held with multilateral lenders like the World Bank.

Brady bonds, named after former U.S. Treasury secretary Nicholas Brady, were issued by emerging economies in the 1980s after they defaulted on their debt. Defaulted debt was converted into Brady bonds with U.S. Treasury bonds added as collateral.

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