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Jamaica to retire $3B in oil debt to Venezuela

July 24, 2015

KINGSTON, Jamaica (AP) — Jamaica has forged a deal to retire $3 billion in oil debts to Venezuela thanks to bond sales.

In a Friday statement, Jamaica said it has issued roughly $2 billion in bonds on the international capital market that will pay down the debt it accumulated through Petrocaribe, a Venezuelan program that provides fuel to countries at market prices but under generous credit terms.

Officials say a negotiated settlement with Caracas will dismiss about $3 billion in long-term debt in exchange for $1.5 billion. It was not immediately clear Friday if Jamaica’s deal will retire all of its Petrocaribe debt.

The finance ministry said this week’s bond issue transaction was “the largest capital markets fundraising ever undertaken by the government of Jamaica.”

Jamaica’s Petrocaribe settlement is similar to one the Dominican Republic negotiated with Venezuela earlier this year. That Caribbean country dismissed $4 billion in Petrocaribe debt in exchange for $2 billion.

On Thursday, IMF Communications Director Gerry Rice said the organization supports Jamaica’s debt buyback.

“It’s an important step in reducing the value of the country’s public debt and will help to put debt firmly on a downward trajectory,” Rice told reporters.

Jamaica is in the third year of a four-year $930 million loan package with the International Monetary Fund and it has passed consecutive tests without shortfalls.

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