Latin American Herald Tribune - Venezuela Owes $9.3 billion in Debt Costs over Next Year

Amid a growing albeit recognition in government circles that Venezuela inevitably faces the prospect of a sharp decline in oil exports and earnings, the Finance Ministry has announced that Venezuelan is due to pay $9.3 billion in debt service costs both at home and abroad during the final quarter of this year and up to the end of next year.

Although with the official reserves last estimated at $43.5 billion, this is not about to break the bank, the government is said to be thinking again about launching a series of new state debt bonds to help smooth debt payments.

Payments due in the final quarter of this year amount to $2.248 billion, of which $893 million is said to be due on foreign debt.

As of the end of the third quarter, total debt included $29.8 billon denominated in dollars and owed to foreign creditors, marking an increase of $2.5 billion from $27.3 billion at the end of 2007, and $13.7 billion in domestic debt payable in bolivars.

The idea that officials are mulling a new bond issue prompts questions about whether this would find any takers in a financial market full of shattered nerves. Ecuador's decision to renege on payments of debts the government deems illegal has done little to calm qualms about Latin American debt exposure.
In a sign of just how quickly things have turned for the worst, barely four months ago talks was of officials considering a plan for another foreign debt buyback worth $1.5 billion. This never materialized and now it's said that the government hasn't set any dates, and this is seen as a sign that the plan has been shelved indefinitely.

In terms of local currency, the value of domestic debt has been reduced from BFs.35.9 billion at the end of 2007 to BFs.29.7 billion for the third quarter of this year. The decline reflects the amortization of old debts, officials say.