Venezuela's state-owned oil company has warned that it is in danger of defaulting on its debts after investors declined an offer to swap bonds.
Four times in the last month, Petróleos de Venezuela, S.A. (PDVSA) has extended an offer to investors to swap their bonds which mature next year for notes due in 2020. The oil company is required to pay out $1.8 billion this month and $3 billion next month in debt interest and bond maturities.
This week, it warned investors in a statement that if they declined to swap their bonds, the company may end up defaulting.
"Low oil prices will adversely affect the company's ability to generate cash flow from operations, which will impair the company's ability to make scheduled payments on its existing debt, including the existing notes," PDVSA said in a press release earlier this week.
"If the exchange offers are not successful, it could be difficult for the company to make scheduled payments on its existing debt, including the existing notes, which would result in the Company evaluating all alternative options."