UPDATE 1-Venezuela's PDVSA makes majority of 2017N bond payment, sources say

(Adds details on bond payment, prices, context)

CARACAS/NEW YORK Nov 8 (Reuters) - Venezuelan state oil company PDVSA has transferred most of the funds needed to make the final payment on its 2017N bond that matured last week, three market sources said on Wednesday, amid worries that the cash-strapped firm may default.

President Nicolas Maduro said last week that the bond would be paid in full, but added that all future sovereign and PDVSA debt payments would be restructured and refinanced.

Although Maduro said future debt would be honored, investors nonetheless interpreted his comments as an indication his government was preparing to default.

PDVSA has broken the 2017N payment into separate portions, the sources said, asking not to be identified.

They added that it was not immediately evident when bondholders would receive the funds or which bank was the recipient bank for the funds.

PDVSA did not immediately respond to an email seeking comment.

The full payment of $1.169 billion, which includes $1.121 billion in principal and $47 million in interest, was due on Nov. 2. Since October, Venezuela and PDVSA have been skipping interest payments, invoking a 30-day grace period in an apparent effort to ease a cash crunch that has left the country desperately short of basic goods such as food and medicines.

Venezuela and PDVSA bonds were broadly declining on Wednesday. Venezuela's 2018N bond was down 3.000 points to a bid price of 28.500 and a yield of 179.78, while PDVSA's 2022 bond was down 3.750 points to bid 24.250. (Writing by Brian Ellsworth; Editing by Jeffrey Benkoe and Rosalba O'Brien)