Apparently bowing to pressure from foreign bankers, Venezuela has decided to make a $750 million down payment on its recently signed foreign debt agreement, paving the way for renegotiations of the accord.
Foreign bankers have warned the government that they would not grant repayment concessions that the government is seeking if Venezuela did not make the payment to reduce its outstanding principal balance, as called for in the Feb. 26 agreement. In announcing the decision Thursday night, Finance Minister Manuel Azpura declined to say why Venezuela agreed to make the down payment, rather than seek deferral of the $750 million as some government officials had suggested. But he denied pressure from the banks was the reason.
However, bankers had made clear that they would not agree to changes unless Venezuela first agreed to pay the $750 million.
"A lot of banks signed agreements only because the government promised to make the down payment, and thus allow them to reduce their exposure in Venezuela," said one foreign banker here. "Without the down payment, we wouldn't renegotiate the agreement."
President Jaime Lusinchi announced in late April that Venezuela would seek easier terms in the $21.2 billion public-sector foreign debt agreement because a projected 40 percent decline in oil revenue this year had left the government unable to meet both debt service and domestic spending needs.
With the government announcement that it will pay, rather than seek deferral of, the down payment, attention now is focusing on other possible concessions in the talks, which are expected to begin when Azpura travels to New York City next week.
Acknowledging the projected drop in oil income this year from $12.6 billion to $7.5 billion, bankers say they are willing to defer principal payments for 1987, 1988 and perhaps 1989, which would postpone more than $3 billion in payments to later in the 12 1/2-year agreement.
The bankers already have agreed to delay nearly $1 billion in 1986 principal payments, reducing this year's debt payments to $4.2 billion. Bankers say they are cool to a proposal the government is considering under which they would grant $600 million in new loans.
"My bank and many others want to reduce our exposure in Venezuela, not to lend more," said another banker.
The talks are expected to last at least several months, with projections of oil price levels greatly influencing the stance Venezuela and its 450 creditors take. Oil revenue provides 90 percent of Venezuela's foreign exchange.