BI Integrated Oils, Global Dashboard | BI »
Jaimin Patel | BIO »
BI Senior Credit Analyst
1. Dual Probabilities Drive PDVSA, Venezuela Bond Valuations
(Bloomberg Intelligence) -- PDVSA and Venezuela sovereign bond valuations balance the desire and ability of the government to continue meeting bond maturities vs. the likelihood of a regime change that includes restructuring all dollar-denominated debt. The probability of a default over the next year depicted in current credit spreads reflects both the chances of a new regime and the current government's inability to pay debt maturities when due. (09/18/17)
Venezuela, PDVSA Default Risk in CDS Spreads May Be Overstated
The 90% implied probability of default before Dec. 31, 2018 reflected in Venezuela and PDSVA credit default swap spreads, using intrinsic value estimates of 54 cents and 47 cents on the dollar for their respective bonds, may overstate the actual risk of default. (09/18/17)
2. Venezuela, PDVSA Cash Reserves May Avert Default Until Late 2019
PDVSA's $8.1 billion of balance sheet cash at June 30 and Venezuela's remaining foreign-exchange reserves should be sufficient to meet PDVSA bond maturities of $2 billion remaining in 2017 and $2.1 billion of sovereign bond maturities in 2018. Indeed, in the absence of a debt restructuring, a payment default may not occur until October 2019, when a combined $3.3 billion of PDVSA and Venezuela bonds are scheduled to mature.
Venezuela's international reserves have been in steep decline over the past five years, unlike those at regional peers Brazil, Mexico and Argentina. (09/18/17)
PDVSA: Intrinsic Bond Values
Implied Value May Be Higher For Venezuela Bonds vs. PDVSA's
Given scant reliable financial information and highly uncertain legal implications, a loss given default for PDVSA and Venezuela sovereign dollar bonds is very difficult to ascertain. Current bond prices may indicate a higher average intrinsic value for Venezuela over PDVSA bonds. (09/18/17)
3. PDVSA Bond Prices Reflect 47% Intrinsic Value, Plus
PDVSA's unsecured dollar bonds with bullet maturities beyond 2018 trade at prices of 30-47 cents on the dollar -- with price differences largely tied to bond coupons. These prices and coupons appear to be best correlated to an intrinsic value for each bond of 47 cents on the dollar, plus two or three semi-annual coupon payments. This determination uses a 50% short-term annualized discount estimate and assumes a restructuring or default will take place at the end of 2018.
Peer Comparison: PDVSA's bonds have among the highest yields among intermediate-maturity dollar peers that haven't defaulted. Issues from California Resources, Concordia International, MBIA Insurance and Denbury Resources are some of the very few with higher yields. (09/18/17)
4. Venezuela Bonds Indicate Higher Intrinsic Value vs. PDVSA
Venezuela sovereign dollar bonds with maturities beyond 2018 trade at prices of 35-46 cents on the dollar, similar to that of PDVSA bonds. Yet the higher average coupon on the sovereign bonds implies the market places a greater intrinsic value of 54 cents on the dollar -- utilizing a 50% short-term yield estimate and assuming a restructuring or default will occur at the end of 2018. This compares to 47 cents for PDVSA bonds. (09/18/17)
Dienstag, 19. September 2017
Bloomberg Intelligence) -- PDVSA and Venezuela sovereign bond valuations balance the desire and ability of the government to continue meeting bond maturities vs. the likelihood of a regime change that includes restructuring all dollar-denominated debt. The probability of a default over the next year depicted in current credit spreads reflects both the chances of a new regime and the current government's inability to pay debt maturities when due. (09/18/17
Eingestellt von rolf j. koch um 01:02
Sonntag, 17. September 2017
Damit ihr euch ein Bild vom Betrüger Wullinger machen könnt....// Fragt auf der HV jetzt am Mi 20.9.2017 den ChaosNeureuther welche beherrschende Stellung Wullinger bei Carpevigo einnimmt und wie er Carpevigo ausplündert ?????!!!!!!
Eingestellt von rolf j. koch um 08:13
Freitag, 15. September 2017
Venezuela Arbitration Awards Threaten Sovereign Debt Default (Bloomberg Intelligence) -- BlackRock, Fidelity and other holders of Venezuela's sovereign debt may be able to take advantage of unpaid arbitration awards against the country to declare its notes immediately due. Investors in notes issued by Petroleos de Venezuela SA may not be able to do the same, even though PDVSA is wholly owned by Venezuela. (09/14/17)
|Venezuela Sovereign Debt Default|
BI Litigation Analyst
Venezuela Arbitration Awards Threaten Sovereign Debt Default
(Bloomberg Intelligence) -- BlackRock, Fidelity and other holders of Venezuela's sovereign debt may be able to take advantage of unpaid arbitration awards against the country to declare its notes immediately due. Investors in notes issued by Petroleos de Venezuela SA may not be able to do the same, even though PDVSA is wholly owned by Venezuela. (09/14/17)
1. Crystallex Award May Cause Venezuela Default Absent Appeal
Venezuela's failure to pay hundreds of millions of dollars in arbitration awards to Crystallex, Exxon Mobil and others may result in Venezuela's outstanding bonds becoming due and payable if Venezuela loses its appeal. Final judgments in excess of $100 million against Venezuela are an event of default if not satisfied or stayed within 30 days. Holders of 25% or more of each bond issuance may demand immediate repayment of principal and interest in full upon an event of default.
Current holders of sovereign debt issued by Venezuela include BlackRock, Fidelity, Legal & General Group and Ashmore. (09/14/17)
2. BlackRock Can't Yet Rely on Venezuelan Awards for Debt RepaymentReturn to Top
BlackRock, Fidelity and other holders of Venezuelan notes can't yet rely on arbitration awards against Venezuela to force early repayment of their notes. This is because Venezuela is appealing the court decision confirming Crystallex's $1.2 billion arbitration award, and other arbitration awards haven't yet been converted into judgments. If, however, the arbitration awards become final judgments and Venezuela exhausts its appeal rights, noteholders may force early repayment of their notes.
Federal courts are required to enforce arbitration awards against Venezuela as final judgments, and the outstanding judgments thus far exceed the $100 million threshold. Venezuela has an opportunity to appeal the judgments. (09/14/17)
3. Oil & Gas, Mining Arbitration Awards Against Venezuela Maturingp
Contributing Analysts Brandon Barnes (Litigation)
Venezuela faces a maturing class of arbitration cases, meaning that awards could be coming due soon. Exxon Mobil's $256 million arbitration award is in the final stage of proceedings, with a New York court case pending to attach the award on Venezuela's U.S. assets, such as Citgo. That case will likely play out through 2H. Owens-Illinois won a $455 million award that trails behind, but not by much. Other companies in various stages of arbitration include Anglo American and ConocoPhillips. (09/14/17)
4. UBS, Other PDVSA Noteholders Likely Can't Declare Their Debt DueR
Holders of debt issued by Petroleos de Venezuela SA, the state-owned oil company, will likely be unable to declare their debt due, despite significant arbitration awards against Venezuela. Unlike Venezuela's bonds, the PDVSA bonds don't fall into default if judgments are issued against Venezuela. While plaintiffs such as Crystallex are looking to PDVSA and its subsidiaries to satisfy Venezuelan arbitration awards, the judgments are technically against the country, not PDVSA.
Current holders of debt issued by PDVSA include BlackRock, T. Rowe Price, Nordea Bank, JPMorgan and UBS. (09/14/17)
5. Trump May Prompt Sovereign Debt Default With Venezuela Order
President Donald Trump's Aug. 25 executive order banning U.S. investors from buying and selling bonds issued by Venezuela may tempt current noteholders to cause Venezuela to default on its debt. Unable to trade, noteholders could rely on Venezuela's failure to pay the arbitration awards to declare the debt due and payable even if Venezuela has fulfilled its payment obligations and no other event of default exists under the debt documents. A complicated and unprecedented restructuring process would follow. (09/14/17)
Eingestellt von rolf j. koch um 06:26