Bond: Venezuela guarantees repayment in March
Posted January 24, 2015, 10:21 hours. Last updated
The country will not go into default. PDVSA is preparing to issue bonds through its subsidiary Citgo. Arriving increase of petrol and devaluation of the bolivar
FURTHER READING: gasoline Venezuale Bolivar Bond Citgo bond PDVSA bond venezuela default VenezuelaNicolas Maduro Venezuela 2015 XS0214851874 XS0294364103 XS0460546525
Venezuela will not go into default and the payment of debts will be respected. Thus said the Finance Minister Rodolfo Marco Torres in a recent meeting with the financial community held in Caracas and organized by Bank of America Merrill Lynch. The government has already secured the necessary funds to repay the debt before maturity on a bond of 2015 from EUR 1 billion in maturing on March 16th. This is in particular the obligation 7% in 2015 ( XS0214851874 ) issued 10 years ago at 99.30 and for which, thanks to the strengthening of the dollar, at current exchange rates, the state will also save 8-9%. Not to mention, as rumors that the government is using the pension fund money in a short game around by buying it at a discount within 50 days of the expiry thus saving further cost reimbursement. Practice, already adopted in October 2014 in view of the expiry of government bonds and PDVSA.
Venezuela: 10 billion of debt maturing in 2015
But the repayment of the bond Venezuela 7% in 2015 is only a small part of the financial costs that Venezuela will have to bear in the course of 2015 and amounted to about $ 10 billion, including interest payments and repayment of state bonds and PDVSA. In particular on the state oil company weighs the deadline from 1.4 billion at the end of October 2015 (XS0460546525) and amortization of 33% of bonds from $ 6 billion PDVSA expiring 2017. And, as they look a long time since analysts The risk of default increases in the vicinity of debt maturities in 2016 and 2017, as shown by the five-year CDS (7,300 points) that measure the probability of default of an issuer assuming that this will happen with probability greater than 90%.But finance is all random and politics, as well as international interests, could play a decisive role.
Citgo will issue bonds to refinance PDVSA
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Venezuela will be saved, but Maduro is already in default
Meanwhile, in economic environment plagued by rampant inflation (65%) with a fiscal policy that does not exist (VAT 12%) and a change to the black market the bolivar in tragic circumstances, it seems increasingly unlikely that Maduro will carry through even the minimal reform on a country that proved unsuccessful. The Central Bank reserves are at their lowest for 11 years (just over $ 20 billion, including 15 gold) and the GDP is seen falling to 2.3% for 2015, while the rationing of medicines and goods Staples, from bread to toilet paper, is now well established. And economic aid recently obtained from China (20 billion dollars of investment from elargirsi with dropper), in addition to the support of investors from Qatar and the Russian Rosneft looks more like a prop financial protection of foreign interests in Venezuela as well as a political blackmail masked.Maduro, in fact, will be forced to devalue the bolivar and to raise the price of gasoline (petrol), the lowest in the world, risking consciously popular revolts. If Venezuela manages to avoid default this year, the same can not be said for his president that from the standpoint of moral and political failed long ago.
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