Venezuela's national oil and gas company PDVSA announced a debt exchange offer, which we would view as a distressed exchange, if completed. Under the proposed transaction, the company would exchange its outstanding 5.25% and 8.5% senior unsecured notes due 2017 for new 8.5% senior secured notes due 2020. We're lowering our corporate credit rating on PDVSA to 'CC' from 'CCC'. At the same time, we're lowering our issue-level ratings on its $3.0 billion 5.25% senior unsecured notes due April 2017 and on its $4.1 billion 8.5% senior unsecured notes due November 2017 to 'CC' from 'CCC'. The outlook is negative, reflecting a downgrade potential if the company completes the exchange offer, which we classify as tantamount to default. If PDVSA
