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Message: PDVSA FILES SUIT AGAINST 2020 CITGO COLLATERALIZATIONN

Guaido has a 50:50 chance of eliminating the 2020 bondholders' CITGO takeover threat. At a minimum, his legal counsel can drag this action through the U.S. courts for a couple of years, including appeals all the way to the Supreme Court.

Three things working against him:

1.- PDVSA had never been required to get approval from the National Assembly (N.A.) on debt financing, since the Constitution exempts it from such obligation, if it does not fall within the "Public Interest" article of the Constitution,

2.- Guido paid the last interest payment due on the 2020 bonds,

3.- Since Maduro new that the N.A. would not approve the 2020 bond issuance, he had the Venezuelan Supreme Court of Justice, which he controls through hand-picked justices elected before the opposition won a majority in Congress, to decide that 2020 bond issuance did not need the N.A.' approval.

And three things working for him:

1.- The 2020 bonds issuance was unusual in that it pledged 50.1% of CITGO, whereas the previous PDVSA bonds did not involve collateral,

2.- The last interest payment on the 2020 bonds was made by Guaido "under protest",

 

3.- The National Assembly was against the issuance of the 2020 bonds because it was very expensive and put CITGO at risk. Therefore, it issued a warning to Maduro's government and the interested parties that the 2020 bond issuance fell under the "Public Interest" article in the Venezuela Constitution that requires approval by the National Assembly of this type of financial commitments by the government and the state's enterprises.

Follow this link...

https://ufile.io/l5o9fx02

 

 

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