• 4 minute Hey Oil Bulls - How Long Till Increasing Oil Prices and Strengthening Dollar Start Killing Demand in Developing Countries?
  • 8 minutes Could oil demand collapse rapidly? Yup, sure could.
  • 15 minutes Oil and Trade War
  • 4 hours Oil prices going down
  • 2 hours Could oil demand collapse rapidly? Yup, sure could.
  • 1 hour Migrants: Italy Wants EU Border Agency In Africa, Not At Sea
  • 28 mins Are EVs Safer Than Combustion Engine Vehicles?
  • 8 hours Sabotage at Tesla
  • 2 hours What If Canada Had Wind and Not Oilsands?
  • 16 hours Oil and Trade War
  • 1 hour Sell out now or hold on?
  • 4 hours Trump Hits China With Tariffs On $50 Billion Of Goods
  • 16 hours venezuala oil crisis
  • 18 hours Russia and Saudi Arabia to have a chat on oil during FIFA World Cup - report
  • 16 hours Germany Orders Daimler to Recall 774,000 Diesel Cars in Europe
  • 5 hours The Irrelevance Of BTU Rating - Big Oil's Gimmick To Hoodwink The Public
  • 12 hours The Wonderful U.S. Oil Trade Deficit with Canada
  • 2 hours Nopec Sherman act legislation
  • 4 hours After Three Decade Macedonia End Dispute With Greece, new name: the Republic of Northern Macedonia
Europe Is Awash With Oil Stored On Ships

Europe Is Awash With Oil Stored On Ships

Bullish sentiment in markets makes…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Goldman’s Venezuelan “Hunger Bonds” Deal Backfires

Goldman

The $2.8 billion Venezuelan bond deal made by Goldman Sachs, which brought the bank harsh criticism from its peers and activists, is now making the Wall Street major a loss as the price of the bonds plunge.

Goldman bought the 2022-maturing bonds from the state-run PDVSA for 31 cents on the dollar earlier this year in what seemed like a bargain at the time. But Caracas’ opposition-controlled Congress condemned the purchase, dubbing the “hunger bonds” as a scheme to make a “quick buck off the suffering of the Venezuelan people.” 

But Goldman is finding that quick buck rather elusive, as the price of the bonds are now down to 25 cents on the dollar after President Nicolas Maduro announced a plan to restructure over $60 billion sovereign and PDVSA debt during an upcoming meeting in Caracas with existing creditors. This means that Goldman has lost at least $54 million on the deal—so far.

“The opposition has already said they won’t honor that bond, so you’re taking a big risk trading those,” Russ Dallen of Caracas Capital told the Financial Times.

By the end of next year, the government and state-owned PDVSA must repay debt obligations to the tune of $13 billion, and foreign currency reserves are less than that already, at $10 billion. The country is also subject to economic sanctions from the United States, which prohibit any U.S. entities from taking part in any business dealings with Venezuela, including lending Venezuela a helping hand through debt restructuring.

As Bloomberg author Katia Porzecanski wrote in a recent overview of the Venezuela situation, a lack of access to U.S.-based banks and investment companies will make the debt restructuring initiative very difficult if not impossible, as debt restructuring almost invariably involves new debt issuance. Imports are at multi-year lows and the population is suffering from shortages in basic goods including food and medicine.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • DDD on November 09 2017 said:
    Calculation is wrong. 6 cents down / 31 cents = ~ 19% of 2.8 billion is 540 million and not 54 million.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News