Article

2015-01-24 Caribbean-Latin America

Venezuela president reveals plans to boost economy

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Posted by Fred 2015-01-24 00:00|| || Front Page|| [8 views ] Top
File under: Commies

#1 Strap on a rocket, point it upward, and accelerate down the drain.

Posted by Alaska Paul 2015-01-24 00:40|| 2015-01-24 00:40|| Front Page Top

#2 Venezuela looks for short-term relief in Citgo debt sale

NEW YORK, Jan 20 (IFR) - Dollar-starved Venezuela will use its US refining unit Citgo to sell US$2.5bn of new debt, as the OPEC country tries to fend off default worries amid a steep slide in crude oil prices.

With some US$10bn in debt payments due this year, the country hopes to be able to lock in cheap funding as it struggles to plug a widening financing gap.

A US$1.5bn high-yield bond and a US$1bn senior secured five-year term loan will be sold through Citgo, the US subsidiary of state-run oil company PDVSA.

The following makes no sense at all, but is included for completeness:

Because investors face much higher recovery prospects on Citgo's bonds compared those issued by PDVSA or the sovereign, the company's bonds have been trading at a fraction of the yield demanded by investors on Venezuelan securities.

To my simple-minded point of view, recovery prospects on Citgo debt are the same as on that of Venezuela itself: ZERO. Deals like this don't come along very often, BUY NOW or forever lose your chance to lose your money.

Posted by Anguper Hupomosing9418 2015-01-24 00:46|| 2015-01-24 00:46|| Front Page Top

#3 Source for above.

Posted by Anguper Hupomosing9418 2015-01-24 00:47|| 2015-01-24 00:47|| Front Page Top

#4 It is going to crater.

The next Argentina.

Posted by newc 2015-01-24 01:07|| 2015-01-24 01:07|| Front Page Top

#5 ...Yeah, Maduro's pretty much pulling it out of his a$$ at this point.

Mike

Posted by Mike Kozlowski 2015-01-24 06:52|| 2015-01-24 06:52|| Front Page Top

To my simple-minded point of view, recovery prospects on Citgo debt are the same as on that of Venezuela itself: ZERO.

Citgo has tangible physical assets in the US that have intrinsic value. When Maduro buries Citgo under a mountain of debt that's too large to service the creditors will have access to US courts and little trouble moving against the physical assets located in the US.

Venezuela itself is another matter. What court outside Venezuela would hear your case? If you found one and obtained a favorable judgment how would you go about enforcing it? Think the US would allow you to seize Venezuelan assets held in US banks? Or that bankers in London or Zurich would comply? No and your problem will be the same no matter where you go.

Best case scenario would be some sort of mediated settlement whereby creditors would receive new Venezuelan bonds with principal amounts equivalent to a few cents on the dollar as compared to the defaulted ones being replaced. Venezuela would then make the de minimis coupon payments for a few years, thump its chest and proclaim the superiority of socialist utopias then default again. Wash, rinse, repeat.

Actually enforcing one's claim in cases of sovereign defaults requires rather large concentrations of troops, many billions of dollars worth of military hardware and the willingness to employ both within the borders of the defaulted sovereign for extended periods of time. Sadly, most bond investors are lacking that sort of firepower.

Posted by Phomock Snore9558 2015-01-24 08:52|| 2015-01-24 08:52|| Front Page Top

#7 What court outside Venezuela would hear your case? If you found one and obtained a favorable judgment how would you go about enforcing it? Think the US would allow you to seize Venezuelan assets held in US banks? Or that bankers in London or Zurich would comply? No and your problem will be the same no matter where you go.

Cuban connection. A lot of American property was nationalized via the Cuban political and judicial route. Same issue which is part of the existing legislation in place [not that this administration has any need for law] which deals with what can/can not be done with Cuba because of that property.

Posted by Procopius2k 2015-01-24 09:24|| 2015-01-24 09:24|| Front Page Top

#8 "Venezuela president reveals plans to boost economy"
Take up all the wealth and tell everyone to start over?

Posted by ed in texas 2015-01-24 09:48|| 2015-01-24 09:48|| Front Page Top

#9 "Everyone gets a 15% raise. Unfortunately, inflation is at 67%, so you still lost 52%. Because..Socialism"

Posted by Frank G 2015-01-24 13:13|| 2015-01-24 13:13|| Front Page Top

#10 Sell Venezuela to China?

Posted by g(r)omgoru 2015-01-24 13:18|| 2015-01-24 13:18|| Front Page Top

#11 Mature said nothing. There is. Vague promise of a free exchange rate along with the with a possible change Sicad 2 which is currently held had 52.10 to the dollar,, the implicit rate is 96.6, the parallel rate Is nearing 185 to the dollar. Copy?

There is enough money to pay off Vzla. Bonds this year with current belt tightening. But not next year, even if oil goes to 120.

Posted by Shipman 2015-01-24 14:47|| 2015-01-24 14:47|| Front Page Top

#12 You are wrong PS. CITGO will be seized as soon as U.S. U.S. Forts give the go code.

One reason why even the Chiba
Née won't touch it.

Posted by Shipman 2015-01-24 14:53|| 2015-01-24 14:53|| Front Page Top

#13 Damn China. Much less the the dread Chiba Nee.

iPad WatF?

Posted by Shipman 2015-01-24 15:02|| 2015-01-24 15:02|| Front Page Top

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