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Venezuela in search of funds as $3B debt repayment looms

Venezuela is looking to obtain funds from a U.S. investment fund to help the country meet nearly $3 billion in external debt payments due later in April amid rising investor concerns over a potential default.

Opposition lawmaker Rafael Guzman said the country's central bank, Banco Central De Venezuela, is in talks with New York-based Fintech Advisory Inc. for about $500 million in financing using roughly $1.5 billion in bonds issued by state oil company PDVSA as collateral, Reuters reported.

Another option being considered by the government is an offering of U.S. dollar-denominated bonds to local lenders in return for their foreign currency positions.

"These are desperate measures because [Venezuela] in April has to fulfill its obligations and apparently does not have the resources," Guzman, who occupies a seat on the congressional finance commission, told journalists.

Venezuela is also in negotiations to obtain financial assistance from Russian state oil firm Rosneft to help meet PDVSA's debt obligations in April, traders and a government source recently told Reuters.

The search for cash comes as a sell-off in dollar bonds issued by Venezuela and PDVSA accelerated on April 4, with the sovereign's benchmark 2027 bond falling 3% and a 2035 note from the oil firm falling 2.7%, the Financial Times reported. According to the publication, PDVSA faces a $2.05 billion debt repayment on April 12.

Venezuela is also struggling with an internal political crisis as the Supreme Court, which is closely allied with President Nicolas Maduro, recently moved to assume the powers of the opposition-led Congress, although the decision was later reversed.