Venezuela waves off default fears on IMF pullout (Reuters)

[Eugene]

Source: Reuters

UPDATE 3-Venezuela waves off default fears on IMF pullout
Thu May 3, 2007 6:08pm ET

By Alonso Soto

QUITO, May 3 (Reuters) - Venezuela on Thursday reiterated it planned to leave
the International Monetary Fund and the World Bank, despite investor concerns
over a possible technical debt default the withdrawal may trigger.

Venezuelan Finance Minister Rodrigo Cabezas told Reuters in Quito, Ecuador,
that he was confident bondholders would not ask for a swift debt payback and
said Venezuela would honor all its foreign obligations despite separating from
the lenders.

-snip-

"There is no possibility that Venezuela will stop paying its foreign obligations,"
he said.

-snip-

But Chavez's government has sought to ease investor jitters that the planned
withdrawal could force a technical default as Wall Street banks urge clients to
reduce their exposure to Venezuela's sovereign debt.

Clauses covering sovereign deals mean Venezuela's bonds would be in default
should it leave the IMF, allowing investors to demand the government pay them
back immediately. Cabezas has not said when the withdrawal would take place.

-snip-

Read more: http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-05-03T220817Z_01_N03450637_RTRIDST_0_VENEZUELA-IMF-UPDATE-3.XML

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Related: Venezuela Pulling Out of IMF, World Bank - AP