Monday , August 2 2021

AN Allowed Repayment of Interest on the Pdvsa 2020 Bond

The Opposition-Controlled Financial Commission of the National Assembly resolved yesterday to cancel about 71 million dollars in interest on the holders of the state oil company Petróleos de Venezuela (Pdvsa), which expires in 2020.

The interest payment must now be approved by Parliament's plenary session next week to prevent holders of these securities from trying to confiscate Citgo, the Pdvsa refinery in the United States, which is a guarantee of the issue of the documents.

The abolition of bondholders is the first payment encouraged by Parliament Speaker Juan Guido.

Guaidó has a strategy to protect Venezuela's assets abroad and took control of Citgo, for which it has appointed a parallel administrative council, just as it did in the PDVSA. This transitional directive of the state oil company, which does not yet control the day-to-day operations of the industry, is responsible for Parliament's request for a revocation of the bond interests.

The National Assembly is the only body recognized as legitimate by Washington. The deadline for paying interest is due on April 27, but the contract gives 30 days for cancellation.

Interest rates will be paid to bondholders during this grace period, Deputy Vice President Juan Andres Mechia said, adding that the procedure is delayed, as the OFAC of the Treasury Department is required to authorize the cancellation.

"This is a legal procedure that lasts for several days," said the MP, who did not specify where the $ 71 million cancellation would come. "There are different modalities, but I can not do what they would be," he added.

Mejía said the main goal is "to keep the activity" and that "Maduro should not make these payments" because he lacks legitimacy.

PDVSA did not respond to requests for comment. The decline in revenue in Venezuela since the end of 2017 has delayed the repayment of foreign debt interest by about $ 8,000 million.

Yesterday, the economist and chairman of the firm Torino Capital was a supporter of the adopted measure for the cancellation of interest on the bonds payable by PDVSA.

"The decision of @jguaido to preserve Citgo is correct, preventing the implementation of the company guarantee provided by Maduro, which must be accompanied by a clear explanation of the nation's property protection strategy for the time of usurpation," he said in his account on Twitter @frrodriguezc.

"The question goes beyond whether to pay $ 71 million due now, do you plan to pay and Rosneft, which owes $ 1.1 billion, also guaranteed by Citgo's shares? What will be done with the October payment of 914 million dollars if usurpation has not stopped yet? "asked the expert.

He added: "There are many national debt guaranteed in one way or another by our external assets, and the ability of the interim government to fulfill these commitments if the usurpation is extended is limited, so it is urgent to explain the medium- and long- .

"Creditors need to understand that our country needs time and resources to resolve the political crisis and begin to rebuild our economy," Rodriguez said.

In turn, AN Vice-President and economist José Guerra said that Parliament would do its best to keep Citgo's assets. "They held Citgo in a leonine condition with the Pdvsa 2020 bond and set up a $ 8,000 million $ 1,500,000 loan company." They do not want the bonus to be paid so Citgo is lost, that's all we we will not let it, "he said.

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