VENEZUELA-OPPOSITION/ECONOMY-CAPRILES Venezuela needs debt refinancing, not default - Capriles

Record ID: 147176

  • Title: VENEZUELA-OPPOSITION/ECONOMY-CAPRILES Venezuela needs debt refinancing, not default - Capriles
  • Date: 14th July 2015
  • Summary: CARACAS, VENEZUELA (JULY 14, 2015) (REUTERS) ****WARNING CONTAINS FLASH PHOTOGRAPHY*** VENEZUELAN OPPOSITION LEADER HENRIQUE CAPRILES BEGINNING NEWS CONFERENCE MEDIA VARIOUS OF NEWS CONFERENCE (SOUNDBITE) (Spanish) HENRIQUE CAPRILES, VENEZUELAN OPPOSITION LEADER, SAYING: "We must sit down immediately to find better conditions for Venezuela's external debt payment. I do th
  • Embargoed: 29th July 2015 13:00
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  • Topics: General
  • Reuters ID: LVA83HXXQDF5KE3Z5V3VHD1ZCDNU
  • Aspect Ratio: 16:9
  • Story Text: Venezuela must refinance its foreign debt to improve government cash flow in the face of recession and soaring inflation, opposition leader Henrique Capriles said on Tuesday (July 14), but added a default would have "terrible consequences" for the country.
    The OPEC nation is struggling with the shrinking economy and chronic shortages of basic goods following last year's oil market rout, with bond payments taking up a growing portion of available hard currency.
    "We must sit down immediately to find better conditions for Venezuela's external debt payment," Capriles told a news conference.
    "I do think that, in terms of our obligations, we could even expand the resources we free up to create a package that improves terms for payment of our obligations," he said, adding he wasn't talking about non-payment.
    Venezuela faces $6.44 billion in debt service between August and December, according to Thomson Reuters data, that is equivalent to about 40 percent of the central bank's international reserves.
    The country's economic malaise has boosted investor concerns about a possible debt default, leaving Venezuelan bonds yielding almost 30 percentage points more than comparable U.S. Treasury notes - the highest of any emerging market nation.
    Capriles, two-time presidential candidate and governor of Miranda state, said there was no reason for the International Monetary Fund to be involved in a debt refinancing deal.
    He said the proposal was part of his own broader plan for economic recovery. It was not immediately evident if either the government or the opposition coalition would back the idea.
    Venezuela could save $10 billion through a voluntary refinancing plan, an aide to Capriles said.
    Refinancing generally involves negotiating an agreement with creditors to improve the terms of a financing arrangement, while default implies that the borrower unilaterally refuses to make payments or does not do so as scheduled.
    Low oil prices together with a sputtering state-led economic model have pushed Venezuela into recession and spurred inflation that is believed to be in triple digits. The central bank this year has not published basic economic indicators.
    Polls show that frustration over the economy, particularly with long supermarket lines and constant scrambling for consumer goods ranging from meat to medicine, could lead the ruling Socialist Party to lose the December 6 parliamentary elections.
    President Nicolas Maduro dismisses default rumours as part of a right-wing smear campaign and insists the government will meet all debt commitments, noting that the Socialist Party has never missed a bond payment.
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