- The Washington Times - Sunday, February 26, 2006

From combined dispatches

CARACAS, Venezuela — Venezuela plans to buy back its outstanding debt in two types of Brady bonds as the country uses proceeds from high oil prices to pay off its foreign debt.

The Finance Ministry said that it plans to buy back about $700 million in Brady bonds by Wednesday, while the remainder will be repurchased on the dates of future interest payments.

The Venezuelan government plans to eventually buy back a total of about $3.9 billion in Brady bonds, or about 15.2 percent of Venezuela’s foreign debt, a ministry official told Dow Jones Newswires.

Brady bonds, named after former U.S. Treasury Secretary Nicholas Brady, arose during the 1980s to help reduce debt held by developing countries that frequently defaulted on loans.

President Hugo Chavez has said that such debt instruments are designed to benefit rich countries while saddling poorer ones with crippling interest payments. He has made buying back foreign debt a matter of policy amid the government’s surging revenues from oil exports. Venezuela is the world’s fifth-largest oil exporter.

Venezuela’s oil minister, meanwhile, said that his country could sell oil easily to markets other than the United States and is prepared to end exports to its No. 1 buyer if necessary.

The Venezuelan government has stepped up threats to cut off oil exports to the United States and sell Venezuelan-owned refineries there amid rising tensions with the Bush administration.

“If our country, our process, our constitution are attacked by the Bush administration, we are not going to send any more oil,” Oil Minister Rafael Ramirez told the Ultimas Noticias newspaper in an interview published yesterday. “We’ll see then which of the two governments is able to manage this type of a situation better.”

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