Financial Times: Venezuela woes on paying Russia debt raise prospect of default

GSAM has faced a storm of criticism for buying the PDVSA bonds, which opposition leaders say will not be honoured if the government falls. So far, says Russ Dallen of investment bank Caracas Capital, there have been no takers for the sovereign bonds.

“The PDVSA bond is toxic but not as toxic as the sovereign,” he says. “That one is incredibly radioactive. There have been no takers as far as I know, even at 20 cents.”

***

Mr Dallen at Caracas Capital — who is also publisher of the Latin American Herald Tribune, which first reported that Venezuela’s failure to pay its Russian debts had left a $1bn hole in Russia’s 2017 budget — points out that while Venezuela’s original default on its Russian debt happened some time ago, Russia’s public auditors say Venezuela has continued to miss payments this year, including one in March.

https://www.ft.com/content/c963883e-4c54-11e7-919a-1e14ce4af89b

Barron’s: Venezuela Gasps On Capitalist Bond Buying – Goldman & Spin

Here’s what Venezuela bond investor and Latin American Herald Tribune publisher Russ Dallen doesn’t mince words on Goldman’s Venezuela bond purchase:

“… full-court press on the issue — the latest leg seems to be looking for Dinosaur SecuritiesJavier Perez-Santalla, who is thought to be the intermediary between the Venezuela Central Bank and Goldman, and wondering just how much the spread was on this transaction. Dinosaur Securities is an extremely small shop and does not have $900 million to buy these bonds. They merely broked [sic] the bonds to Goldman, making Goldman’s statement that they “bought the bonds in the secondary market and did not buy them directly from Venezuela” bull**** technical spin …”

Dallen also is questioning the numbers, based on previous reporting on size of the bond issuance. he adds;

” … if the WSJ is correct and Goldman bought $2.8 billion of the PDVSA 6% of 2022, what does [U.S. investment fund Fintech Advisory] have in repo, because according to the Reuters story last month Fintech got $1.3 billion of the PDVSA 6% of 2022 (at what looked to be a price of 23). The problem is that there are only $3 billion of these bonds — so either at least one of the stories is incorrect, or the Venezuela Central Bank recalled the Fintech repo early, or Venezuela and PDVSA made more than $3 billion of this bond …”

http://www.barrons.com/articles/venezuela-gasps-on-capitalist-bond-buying-goldman-spin-1496250006

El Nuevo Herald: Ante caos venezolano, recomiendan a Congreso de EEUU aplicar más sanciones e investigar vínculos con Moscú

“Si el régimen continúa negando a su pueblo el acceso a alimentos y a medicinas, así como los derechos humanos y democráticos básicos, nosotros deberíamos considerar detener el flujo de dinero”, manifestó Russell Dallen, presidente y editor en jefe del Latin American Herald Tribune, en referencia a la importación diaria de cerca de 800,000 barriles de crudo venezolano, que según el experto es lo que “mantiene las luces encendidas en Venezuela.

Dallen dijo en la audiencia realizada el martes que ese tipo de sanciones pueden ser aplicadas a través de la introducción de un impuesto a las importaciones de crudo venezolano, o simplemente prohibiendo las compras de productos de ese país.

“A quienes pisotean las normas de libertad más básicas del mundo no se les deberían permitir que se beneficien del acceso al mayor mercado del mundo”, señaló Dallen.

Por lo general, los panelistas esbozaron un panorama desolador de la situación económica de Venezuela, diciendo que la economía del país se encuentra al borde del precipicio.

***
Parte de esos fondos fueron utilizados por el chavismo para preservar sus fraternales relaciones con Rusia, incluso incurriendo en gigantescas deudas para comprar armas de ese país.

“Chávez se endeudó para adquirir más para comprarle a [el presidente ruso Vladimir] Putin $6,000 millones en armas, incluyendo 92 tanques T-72, 24 jets de combate, sistema de misiles antiaéreos S-300, 15 helicópteros de combate Mi-35m, 20 helicópteros multiuso Mi-17-1B, tres helicópteros de transporte Mi-26T, además de rifles de asalto Kalishnikov”, explicó Dallen.

Más recientemente, el régimen ha permitido el acceso de Rusia a su industria petrolera, otorgándole participaciones en emprendimientos conjuntos de explotación de crudo en Venezuela y la posibilidad de llegar a ser dueña de más de la mitad de las acciones de Citgo, tras colocar el 49.9 por ciento del capital accionario de la filial estadounidense como garantía en un préstamo de $1,500 millones que le concedió Rosneft.

“Nosotros no sabemos cual es el gatillo para que Rosneft asuma el control del 49.9 por ciento de Citgo, o incluso si ese gatillo ya ha sido apretado”, advirtió Dallen.

Dallen recomendó que el Comité sobre Inversiones Extranjeras de Estados Unidos (CFIUS) abrá una investigación e inicie un análisis sobre la situación interna de Citgo para determinar si Rosneft es actualmente el verdadero dueño de la refinería estadounidense.

ConocoPhillips Sues Russia’s Rosneft & Venezuela’s PDVSA for Fraud in CITGO Transfer

Rosneft“When China’s state-owned oil company CNOOC made an $18.5 billion bid for U.S. oil company Unocal in 2005, Unocal ended up having to accept a lower bid from ChevronTexaco after “political tensions,” notes Russ Dallen, who helped uncover and investigate the Rosneft lien.

“But even if a Trump administration that seems to regard Putin as a friend — despite the experiences of Bush and Obama — approves the transaction, more likely, as happened in 2006 when CFIUS approved the takeover of P&O (which owned and leased ports and terminals in the U.S.) by state-owned Dubai Ports World (DPW), Congress will move to block it. DPW ended up divesting P&O’s U.S. operations to American International Group after the furor,” Dallen notes.
UCC FILING

The Uniform Commercial Code (UCC) filing is used to protect creditors and let other potential creditors know that they have an interest in the asset.

In October, in addition to a 20% bonus, PDVSA used 50.1% of Citgo Holding Inc. as collateral to induce $2.8 billion of holders of PDVSA debt maturing within the year to extend into a new 4 year amortizing bond. As a result, should PDVSA default, the holders of the new $3.4 billion PDVSA 8.5% of 2020 would be able to take 50.1% of Citgo Holding Inc.

The Rosneft UCC filing meant that 100% of Citgo Holding is now encumbered and potentially at risk.

RUSSIA’S EXPANDING ENERGY FOOTHOLD

Rosneft is a minority shareholder in five joint crude oil-producing companies in Venezuela: Petro Miranda, Petro Victoria, Petro Perijá, Petro Monagas and Boquerón.

In 2010, Venezuela President Hugo Chavez sold PDVSA’s stakes in 4 Ruhr oil refineries in Germany to Rosneft for $1.6 billion, giving Rosneft a key foothold in the European market.

“Last week, Rosneft managed to gain control of the shares in Ruhr Oel that it did not yet own,” points out Dallen. “As a result, Rosneft is now the third largest refiner in Germany — an aggressive expansion by Rosneft that we are seeing all over the world.”

Founded in 1992, Rosneft became the world’s biggest oil and gas producer by volume (5.2 million barrels per day) through acquiring others. In 2004, Rosneft took over competitor Yukos after Vladimir Putin jailed Yukos head Mikhail Khodorkovsky and in 2013 Rosneft took over TNK.

In 2014, Rosneft took over Bashneft after its owner, too, was arrested.

BP owns 19.75% and a consortium of mining and trading firm Glencore and the Qatar Investment Authority just paid Russia $11.3 billion for 19.5% of Rosneft. Another 10.75% floats on the Russian stock exchange.

The Russian government owns the remaining 50% of Rosneft, and Rosneft head Igor Sechin is a long-time ally and assistant to Russian President Vladimir Putin.

In October, Rosneft acquired Indian refiner Essar Oil in a $13 billion deal. The transaction included India’s second-largest refinery at Vadinar (400,000 bpd), as well as port terminals, power plants and pumps.

Earlier this month, Rosneft acquired 30% of the Shourouk concession in Egypt and its supergiant offshore Zohr gas field from Italy’s Eni SPA for $1.575 billion.

And it is now the third largest refiner in Germany.
In spite of European and U.S. sanctions on Rosneft and its head Sechin over the annexation of Crimea, Dallen points out that Rosneft has made billions of dollars in overseas acquisitions this year in addition to raising billions from an equity sale to Glencore and Qatar.

“Even as sanctions against them continue to be renewed, it is clear that the Russians are using Rosneft to further Putin’s geopolitical ambitions,” says Dallen. “But will the U.S. government stand for a country with which we have an increasingly adversarial relationship owning strategic energy assets in the United States? It could be an early test for a Trump administration that has seemingly conflicting viewpoints and relationships with Russia.”

http://laht.com/article.asp?ArticleId=2428924&CategoryId=10717

Одна из крупнейших нефтяных компаний США подала иск к «дочке» «Роснефти»

RosneftДочерние структуры американской ConocoPhillips, крупнейшей по запасам и добыче независимой нефтяной компании в США и мире, подали в суд на швейцарскую трейдинговую компанию Rosneft Trading S.A. (100% принадлежит «Роснефти»), обвинив ее в участии в схеме «мошеннической передачи активов» (fraudulent transfer по законам штата Делавэр, где подан иск), подконтрольных венесуэльской госкомпании PDVSA, сообщила базирующаяся в Каракасе Latin American Herald Tribune. Ранее аналогичный иск к Rosneft Trading S.A. предъявила канадская золотодобывающая компания Crystallex, писал РБК.

http://www.rbc.ru/business/12/01/2017/58773a089a794724c6329242

Aporrea: ¿CITGO ha sido hipotecada?

ucccitgo1Por su parte, Russ Dallen del Fondo de Oportunidades Venezuela , que ayudó describir la hipoteca secreta, señaló que el 30 de noviembre las reservas de Venezuela subieron en $ 891 millones y que los analistas no han sido capaces de dar cuenta de dónde salió el dinero, lo que lleva a la posibilidad de que pudiera haber sido el resto del préstamo de Rosneft.

Dallen agregó que PDVSA dio a entender durante una conferencia telefónica con potenciales inversionistas que participaron en el canje de bonos PDVSA 2020 con garantía de Citgo, que Venezuela era libre de utilizar el restante 49,9% de Citgo Holding en respuesta a una pregunta, acuerdo que pudo haber sido firmado después de que Donald Trump fue elegido presidente de Estados Unidos.

https://www.aporrea.org/actualidad/n302088.html

Venezuela a admiti cu a hipoteca Citgo na Merca

sechin maduro pinoE compania estatal Venezolano PDVSA a confirma e raportahe di Redd Intelligence y Latin American Herald Tribune, y cu NoticiaCla.com a reproduci diabierna ultimo, esta cu a descubri cu Venezuela a hipoteca Citgo pa e compania petrolero Ruso Rosneft. Mes momento sinembargo tabata hopi defensivo, lansando mes momento un atake riba e portadornan di e noticia, esta LAHT, REDD y Russ Dallen.

http://www.noticiacla.com/news/8146

Latin American Herald Tribune: Venezuela Supreme Court asked to Rule if Venezuela & Pdvsa Can Pay US Dollar Bonds in Bolivars

venz-bolivars“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:

Currency Indemnity

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.

http://www.laht.com/article.asp?ArticleId=2423544&CategoryId=10717