PDVSA Successfully Completes Tender Offer

PDVSA announced the successful completion of its previously announced tender offer for any and all of the outstanding 7.63% Series A Bonds due 2009, 8.22% Series B Bonds due 2017 and 8.37% Series C Bonds due 2022, issued by Petrozuata Finance Inc., and the related consent solicitation in connection with the Petrozuata extra heavy crude oil project in the Orinoco Belt region.

Based on information provided by the depositary for the tender offer and consent solicitation, as of the expiration date at 12 midnight, New York City time, on September 12, 2008, a total of US$ 739,809,804 aggregate principal amount of Bonds, representing 97.96% of the aggregate principal amount of outstanding Bonds, were validly tendered, and the consents related thereto were validly delivered. In accordance with the terms of the tender offer and consent solicitation, PDVSA has purchased all of the Bonds validly tendered, for a total purchase price of US$ 824,985,017.79, which includes accrued and unpaid interest to, but not including, the payment date, a premium above par and a consent fee in the aggregate amount of US$ 85,175,213.79. Payment of the purchase price was made yesterday.

PDVSA and the other participants in the Petrozuata project have executed a supplemental indenture and a termination agreement which (i) eliminate substantially all of the restrictive covenants and events of default in the indenture pursuant to which the Bonds were issued and the common security agreement and other financing documents related to the Bonds (other than events of default arising from payment defaults and failure to comply with provisions of the indenture or the Bonds, as amended) and supplement, modify or eliminate certain other provisions of the indenture, (ii) release all of the collateral securing the Bonds, (iii) waive any and all prior and existing defaults, prospective defaults and events of default under the indenture, the common security agreement and the other financing documents, (iv) adopt certain proposed amendments to the common security agreement, the indenture and the other financing documents and certain other agreements related to the Petrozuata project to give effect to the foregoing, and (v) terminate the common security agreement and certain of the other financing documents.


The tender offer and consent solicitation were made pursuant to an Offer to Purchase and Consent Solicitation Statement, dated August 14, 2008 Offer to Purchase and related Consent and Letter of Transmittal Letter of Transmittal


Lazard Fre & Co. LLC was the Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Global Bondholder Services Corporation was the Depositary and Information Agent.