Carib
rerum cognoscere causas
- Registrato
- 1/12/04
- Messaggi
- 20.800
- Punti reazioni
- 4.902
Sempre ipotesi Citi:
Incentive to capitalize on Venezuela’s large oil reserves — Venezuela could offer
investors an ‘Oil Warrant.’ We present the case of an instrument that pays a coupon
of 3%, depending on the oil price, with a maturity of 30 years, that would offer an
additional 5-6pts. However, a Value Recovery Instrument (VRI) could be a valid
alternative, given the complicated restructuring.
Timing of the restructuring not before 2025 — US sanctions for ‘primary’ issuance
have not been lifted, and therefore Venezuela/PDVSA cannot issue bonds. This
suggests that any restructuring would occur if these sanctions are lifted, most likely
not before the presidential election at the end of 2024.
Bond index inclusion is likely — Venezuela/PDVSA bonds, even if in default, will
likely be added back into the major EM indexes since they were removed due to poor
liquidity. With the sanctions lifted, we expect liquidity to increase.
We place a value on a potential Citgo sale at $12-21bn, depending on EV
multiple assumptions used — We note there are many claims against this asset,
and not all proceeds would be available for PDVSA bondholders. A court ordered
public auction may occur in mid-2024.
Incentive to capitalize on Venezuela’s large oil reserves — Venezuela could offer
investors an ‘Oil Warrant.’ We present the case of an instrument that pays a coupon
of 3%, depending on the oil price, with a maturity of 30 years, that would offer an
additional 5-6pts. However, a Value Recovery Instrument (VRI) could be a valid
alternative, given the complicated restructuring.
Timing of the restructuring not before 2025 — US sanctions for ‘primary’ issuance
have not been lifted, and therefore Venezuela/PDVSA cannot issue bonds. This
suggests that any restructuring would occur if these sanctions are lifted, most likely
not before the presidential election at the end of 2024.
Bond index inclusion is likely — Venezuela/PDVSA bonds, even if in default, will
likely be added back into the major EM indexes since they were removed due to poor
liquidity. With the sanctions lifted, we expect liquidity to increase.
We place a value on a potential Citgo sale at $12-21bn, depending on EV
multiple assumptions used — We note there are many claims against this asset,
and not all proceeds would be available for PDVSA bondholders. A court ordered
public auction may occur in mid-2024.