Argentina Pays Down Venezuela Debt

Argentina has issued unsecured promissory notes to pay down a $1.3bn debt to Venezuela coming due February and May, according to a person familiar with the deal. According to Argentina’s official bulletin, the promissory notes will mature in various stages through May 2012. The debt is the result of fuel purchases made by Argentine energy company Enarsa and the energy administrator Cammesa from Venezuelan oil producer PDVSA. The fuel debt has in the past been paid from the budget, but since none was agreed for 2011, the PDVSA payments were in limbo. “This is a firm commitment that the government will stand behind Cammesa and Enarsa for fuel,” says a person close to the transaction.