venezuela sells petrocaribe DR debt

bienamor

Kansas redneck an proud of it
Apr 23, 2004
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Probably not in a good way, Doubt if Goldman Sachs will be satisfied with beans instead of money.
 
May 12, 2005
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Venezuela is desperate for cash. $60 oil is not good for them. DR better start thinking of plan B and plan C for when, not if, Venezuela collapses.
 
Jan 9, 2004
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An absolute coup de tat for GS.

For Venezuela....economic breathing room for a few more months...but the haircut they took on the debt is unprecedented.

For the DR.....as pointed out above...no more beans, goods, etc., as payment.....and the payments will need to be timely...or risk penalties, default etc.


Respectfully,
Playacaribe2
 

dv8

Gold
Sep 27, 2006
31,266
363
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Venezuela is desperate for cash. $60 oil is not good for them. DR better start thinking of plan B and plan C for when, not if, Venezuela collapses.

didn't dominican government admit they had minuscule reserves of petrol? i can see lots of problems ahead if the deliveries of black gold stop...
 

Kipling333

Bronze
Jan 12, 2010
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I do not know what court would decide this matter,but Goldman Sachs is buying from Venezuela the PetroCaribe contract with the DR but I am unsure if anyone standing in the shoes of Venezuela has the right to vary the contract . If I am reading this correctly the price paid to Venezuela immediately is 40% of the value of the current debt . From memory the DR has to pay 50% of the oil purchases within a month or so and the rest is paid 25 years later with an interest rate of 1% , The DR is up to date with its payments that are due monthly so really GS is paying 40% of the amount that is owed in the future . I doubt if there would be any silly clauses making the DR liable to pay all debt immediately if Venezuela sells its its interest in the contract so I see little harm for the DR especially with oil prices at such a low level . But we maybe buying all our oil from outside Venezuela in the future ,,it will be easier to refine
 

zoomzx11

Gold
Jan 21, 2006
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Thinking???????????

maybe they will accept a payment in e-peso? :cheeky:

Venezuela is desperate for cash. $60 oil is not good for them. DR better start thinking of plan B and plan C for when, not if, Venezuela collapses.

When will the DR start thinking????????? Plan ahead?????? Not gonna happen. Might be a good time to invest in horses as that may be the future transportation. I always liked horses anyhow. Sure would end all the highway deaths. Might get me a surry with a fringe on top and a matched pair. Bring back the buggy whip. Beginning to look like a solid improvement over the present mess.
 

bronzeallspice

Live everyday like it's your last
Mar 26, 2012
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Not good at all. That means that the US has "bought" the DR and will do what it wants, have more control.

Americans living in the DR get ready to be screwed!
 

windeguy

Platinum
Jul 10, 2004
42,211
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Not good at all. That means that the US has "bought" the DR and will do what it wants, have more control.

Americans living in the DR get ready to be screwed!

What should the Dominicans, Canadians, Europeans, etc. living in the DR get ready for?
 

PanfilodeVaca

New member
Jan 12, 2014
225
0
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I do not know what court would decide this matter,but Goldman Sachs is buying from Venezuela the PetroCaribe contract with the DR but I am unsure if anyone standing in the shoes of Venezuela has the right to vary the contract . If I am reading this correctly the price paid to Venezuela immediately is 40% of the value of the current debt . From memory the DR has to pay 50% of the oil purchases within a month or so and the rest is paid 25 years later with an interest rate of 1% , The DR is up to date with its payments that are due monthly so really GS is paying 40% of the amount that is owed in the future . I doubt if there would be any silly clauses making the DR liable to pay all debt immediately if Venezuela sells its its interest in the contract so I see little harm for the DR especially with oil prices at such a low level . But we maybe buying all our oil from outside Venezuela in the future ,,it will be easier to refine

Good analysis. There was nothing in the article that suggested DR was in default. If the price of the oil wasn't fixed in the contract, then DR, like other importing countries, is experiencing a big benefit.

Goldman paid 41 cents on the dollar, which was the highest bid Venezuela could attract. The fact is from the moment in 2005 when Chavez made a loan with a 1% interest rate, the loan was worth less than its face value.
 

leromero

Bronze
May 30, 2004
613
4
0
web.mac.com
I do not know what court would decide this matter,but Goldman Sachs is buying from Venezuela the PetroCaribe contract with the DR but I am unsure if anyone standing in the shoes of Venezuela has the right to vary the contract . If I am reading this correctly the price paid to Venezuela immediately is 40% of the value of the current debt . From memory the DR has to pay 50% of the oil purchases within a month or so and the rest is paid 25 years later with an interest rate of 1% , The DR is up to date with its payments that are due monthly so really GS is paying 40% of the amount that is owed in the future . I doubt if there would be any silly clauses making the DR liable to pay all debt immediately if Venezuela sells its its interest in the contract so I see little harm for the DR especially with oil prices at such a low level . But we maybe buying all our oil from outside Venezuela in the future ,,it will be easier to refine

I highly doubt that GS would have done this if they did not see the upside to the deal. Without actually seeing the contract it's impossible to say what that is. Probably a loophole in there regarding the transfer of the payments. It will be interesting to see how it shakes out for sure.
 
Jun 18, 2007
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www.rentalmetrocountry.com

barker1964

Silver
Apr 1, 2009
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Not good at all. That means that the US has "bought" the DR and will do what it wants, have more control.

Americans living in the DR get ready to be screwed!

First of all a private company bought the debt. Not the US Gov't. More than likely the debt can be used in a way to get certain doors open that were closed to them before. A company like Goldman Sachs will not get into any business situation without a clear benefit. So ex-pats need not prepare or worry about a thing.
 
Jan 9, 2004
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I do not know what court would decide this matter,but Goldman Sachs is buying from Venezuela the PetroCaribe contract with the DR but I am unsure if anyone standing in the shoes of Venezuela has the right to vary the contract .

What's to decide?

Venezuela has sold its debt. Unless the contract had a no assignation clause, it is all perfectly legal and done all the time.

The contract can only be varied by its terms that allow it, or by mutual assent of the holder of the contract and the DR, or by a court of competent jurisdiction. While the DR had the option of sending goods for payment...that option is, or was, held by the Venezuelans, and now that the debt has been sold....GS is now the holder of the option and highly unlikely to entertain beans for payment.

If I am reading this correctly the price paid to Venezuela immediately is 40% of the value of the current debt . From memory the DR has to pay 50% of the oil purchases within a month or so and the rest is paid 25 years later with an interest rate of 1% , The DR is up to date with its payments that are due monthly so really GS is paying 40% of the amount that is owed in the future . I doubt if there would be any silly clauses making the DR liable to pay all debt immediately if Venezuela sells its its interest in the contract so I see little harm for the DR especially with oil prices at such a low level . But we maybe buying all our oil from outside Venezuela in the future ,,it will be easier to refine

That silly clause you refer to is an acceleration clause. It is, or can be triggered, if the debtor misses a payment or payments, and is at the option of the holder of the debt.

Petrocaribe will likely continue, But.....only as long as the present government has control. The opposition has already declared they will cancel Petrocaribe if they should gain power. The next elections are scheduled for December 2015...if the country does not implode prior.


Respectfully,
Playacaribe2