Venezuela to Sell $8 Billion of Debt, Barclays Says (Update1)

By Daniel Cancel

July 17 (Bloomberg) -- Venezuela and its state-owned companies plan to sell $8 billion of bonds in overseas markets in the second half of this year, Barclays Plc said.

Venezuela’s government will sell $2 billion of debt while state-owned oil company Petroleos de Venezuela SA will issue $3 billion in international credit markets, Barclays analyst Alejandro Grisanti wrote in a report. State-owned firms Corp. Venezolana de Guayana, an industrial holding company, and utility Corp. Electrica Nacional will sell $1.5 billion of bonds each, according to Barclays.

“We think the increase in the space of a year is exorbitant,” Grisanti wrote. “It is clear that the authorities are expecting further increases in the oil price and are unwilling to restrain expenditure.”

Venezuela is increasing borrowing after oil, which accounted for 93 percent of export sales last year and half of government revenue, tumbled 57 percent from a July 2008 record. PDVSA, as the state-own oil company is known, earlier this week sold the remaining $1.58 billion of dollar bonds from a $3 billion issue it started in the local market two weeks ago. The national assembly has approved 14.7 billion bolivars ($6.9 billion) in additional spending credits this year.

PDVSA doesn’t plan additional bond sales this year, said a company official who declined to be identified in accordance with company policy. A spokeswoman at the Finance Ministry declined to comment on the report.

The debt sales will likely have longer maturities than the $3 billion of two-year bonds PDVSA sold this month, according to Grisanti, who in the report said he met with Venezuelan Central Bank President Nelson Merentes and officials from PDVSA and the public credit office in Caracas recently.

To contact the reporter on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net