But investors are unwilling to swap their bonds and increase their exposure to the cash-strapped company. According to Russ Dallen, strategic adviser for the Venezuela Opportunity Fund, an exchange traded fund invested in Venezuela and PDVSA bonds, said the company is ignoring how the market views a distressed borrower.
“If you have the larger of the two bonds that Venezuela is trying to swap you out of — the $4.1 billion of the PDVSA 8.5 percent (due in) 2017 — you can have half your money back in on November 2 and the other half next year — or you can take the deal and get half your money back in two years and the other half in four years,” he explained to CNBC via email.
“Likewise, if you are in the $3 billion of PDVSA 5.25 percent (due in) April 2017, you can have all your money back in six months or take the deal and have four more years of exposure to a distressed credit.”
The Venezuela Opportunity Fund is not taking part in the bond swap deal.
“This could be a scare tactic, or it could be a real strategy to try to save face and cover up their own incompetence [if they default],” said Russ Dallen of Caracas Capital.
“Both of the 2017 PDVSA bond contracts do mention the payment of the coupons and maturities in other currencies,” says Russ Dallen, Portfolio Manager of the Venezuela Opportunity Fund. “But they also require that it be the equivalent and that bondholders are made whole. That will be difficult with Bolivars.”
Dallen points out the following excerpt from the PDVSA 8.5% of November 2, 2017 bond contract:
U.S. Dollars are the sole currency of account and payment for all sums payable by the Issuer under the Notes and the Indenture. Any amount received or recovered in a currency other than U.S. Dollars in respect of the Notes (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Issuer, any Subsidiary of the Issuer or otherwise) by the Holder in respect of any sum expressed to be due to it from the Issuer shall constitute a discharge of the Issuer only to the extent of the U.S. dollar amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollar amount is less than the U.S. Dollar amount expressed to be due to the recipient under any Note, the Issuer shall indemnify the recipient against the cost of making any such purchase. If that U.S. Dollar amount is more than the U.S. Dollar amount expressed to be due to the recipient under any Note, such recipient will promptly remit the excess to the Principal Paying Agent who, in turn, will remit such amount to the Issuer. For purposes of this indemnity, it will be sufficient for the Holder to certify (indicating the sources of information used) that it would have suffered a loss had the actual purchase of U.S. Dollars been made with the amount so received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on the first date on which it would have been practicable).
The above indemnity, to the extent permitted by law:
- constitutes a separate and independent obligation from the other obligations of the Issuer;
- shall give rise to a separate and independent cause of action;
- shall apply irrespective of any waiver or indulgence granted by any Holder; and
- shall continue in full force and effect despite any other judgment, order, claim or proof for a liquidated
- amount in respect of any sum due under any Note or any other judgment.
RUSS DALLEN, President and Editor-in-Chief at The Latin American Herald Tribune:
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Pero la gota de derramó el vaso en realidad vino después, en la teleconferencia convocada por PDVSA para explicar sus comprometidas finanzas.
“Fue un desastre total, Del Pino no apareció. Dijeron que se había reunido con (el gobernante Nicolás) Maduro y que trataría de llamarnos desde allá. Estaba la presidenta de Finanzas en la llamada, pero ella no dijo una sola palabra. Hubo preguntas y el jefe de operaciones las tomó pero nunca llegó a contestarlas”, relató Russ Dallen, socio gerente de la firma Caracas Capital, quien estuvo en la llamada.
“Las conclusiones que salieron de la llamada fueron dos. Primero, no tienen dinero. Dos, son tan incompetentes que no están jugando cuando dicen que PDVSA va entrar en default si fracasa el canje”, agregó.
La teleconferencia del martes terminó por convencer a muchos tenedores de deuda que el de PDVSA es un caso perdido.
Después de 20 minutos del inicio de la conferencia, los inversionistas comenzaron a vender los bonos de PDVSA. “Dios mío, esta gente no sabe lo que está haciendo, no entiende cómo funcionan los mercados”, dijo uno de ellos.
Entre los vendedores del martes se encontraban dos clientes de Caracas Capital, quienes se desprendieron de posiciones de la empresa estatal valoradas en $30 millones, relató Dallen.
“Se están quedando sin dinero y se están quedando sin pista, así que necesitan vender los bonos”, dice Russ Dallen socio gerente de Caracas Capital Markets, una firma basada en Miami. “Venezuela está desesperada por dinero”.
总部位于迈阿密的委内瑞拉投行加拉加斯资本市场（Caracas Capital Markets）的合伙人Russ Dallen表示，委内瑞拉缺钱缺到无处可逃，该国急需发行债券。
“Il Venezuela è alla disperata ricerca di denaro. Sono a corto di soldi e sono a corto di vie d’uscita”,
ha affermato Russ Dallen della Caracas Capital Markets.
“Si è già verificato un grave collasso dell’economia e la situazione non farà altro che peggiorare con l’interruzione delle esportazioni di petrolio”,
Dù sở hữu trữ lượng dầu thô lớn nhất thế giới, Venezuela đang dần cạn thực phẩm, thuốc men và tiền mặt. Mọi thứ sẽ tệ hơn nữa nếu PDVSA vỡ nợ. Russ Dallen, đối tác quản lý tại Caracas Capital Markets ở Mỹ cho biết: “Họ đang hết tiền và chệch ra khỏi đường băng. Họ cần bán trái phiếu. Venezuela cực kỳ cần tiền mặt”.
De går tomme for penger, og rullebanen tar snart slutt. De trenger å selge obligasjoner. Venezuela er desperat etter penger, sier partner Russ Dallen ved Caracas Capital markets, basert i Miami.
“They’re running out of money and they’re running out of runway, and they needed to sell this deal,” says Russ Dallen, managing partner at Caracas Capital Markets, a firm based in Miami. “Venezuela is desperate for cash.”
The two entities owe $4.8bn to creditors through the end of the year, which is likely to drain available cash levels, according to Russ Dallen of Caracas Capital.
Caracas Capital的Russ Dallen指出，截至今年年底，PDVSA和委瑞内拉总共欠债权人48亿美元，这将耗尽所有可用现金。
In a July 30, 2014 article, citing Russ Dallen, head of Caracas Capital Markets, the Wall Street Journal reported that “Venezuela is looking under couch cushions for coins because they need money . . . . [t]he Exxon and ConocoPhillips judgments are coming any day now and the easiest place to enforce those judgment will be the United States.”
The Financial Times (“FT”) has reported that this pledge of CITGO Assets as collateral could have severe consequences: “PDVSA’s proposed debt swap is also complicated by the proposal to offer up to 50.1 per cent of Citgo as security for bondholders who agree to the deal. Firstly, it is already the state oil company’s main seizable asset in case of a default; secondly, if it is fully pledged to underpin the bond swap then it would in practice deprive other bondholders of their main security.” FT further reported: “Lawyers say this would therefore probably fall foul of the ‘negative pledge’ clause in PDVSA’s existing bonds. Tellingly, the 442 pages of documentation on the debt swap lists no law firms or investment banks involved.” FT wrote: “This is a worrying sign, in that no counsel for PDVSA, no counsel for Citgo, no counsel for the bondholders, no counsel for Venezuela and no counsel for any of the collateral, paying,trustees is putting their name on this document,’ Russ Dallen of Caracas Capital wrote in a note.” FT continued: “Even if enough bondholders sign up, and the legality of the collateral pledge goes unchallenged, Citgo may prove scant security. If PDVSA defaults on the new bonds then investors can seize 50.1 per cent of the US petrol company, but this would trigger a ‘change-of-control’ clause in Citgo’s own $5bn of debt, making it immediately payable.”
“They’re getting tied down with lots of tangles and they’re running out of room and ability to extricate themselves,” said Russ Dallen, a managing partner at Caracas Capital.