Venezuela SeeksTo Monetize Its GoldReserves Amid Severe Cash

[UKIPAMANAGEMENT]

Who is willing and able to monetize a safekeeping receipt (SKR) backed by a BCV SWIFT MT760 for $1.5B and use the proceeds to trigger a managed buy/sellback transaction, use a portion of the profits to recapture the MT760, remove the lien of the gold and continue with the trades?

Proposals are welcome.

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Quote:

Venezuela SeeksTo Monetize Its GoldReserves Amid Severe Cash Crunch
 

The Central Bank of Venezuela (BCV) has entered into talks with Wall Street banks seeking to monetize up to $1.5 billion of its gold reserves in order to bolster the country's shrinking economy, sources say.

BCV is planning to create a gold swap providing its contractor party with 1.4 million troy ounces of gold in exchange for cash, media sources report, citing an unnamed central bank source. After four years, BCV would have the right to buy the gold back. Reportedly, at least two financial institutions, Bank of American and Credit Suisse, are currently involved in the ongoing negotiations.
 
The move would help Venezuela survive the severe cash crunch that has wrought turmoil in the country, which was caused by sharp decline in oil prices and heavy debt payments. The OPEC nation is currently suffering from higher consumer prices, product shortages and a rapidly shrinking economy.

However, neither the Central Bank of Venezuela, nor the aforementioned banks have yet confirmed the information.

It is worth mentioning that up to two-thirds of Venezuela's reserves are held in gold: the country's former leader Hugo Chavez converted most the of state's dollar assets into physical gold in the wake of the world financial crisis of 2008.


Read more: sputniknews.com/business/20150311/1019363384.html#ixzz3UDMO4IYG

[Sapphire Capital]

the way to do this is a credit enhanced structured debt placement under 144A outside the US

[UKIPA Holdings LLC]

Update: Teh rumor has it, the deal is coming apart. The banks demand the gold to be moved and placed under their control. BCV rejected the proposal.

[Sapphire Capital]

not surprised, wonder what they thought would happen, these deals have to be prepared and done different than what they are trying there and it costs money they do not want to spent

[UKIPA Holdings, LLC]

Well, as initially requested. BCV received the loan, keeping the gold under custody in England. It was proposed to secure a line of credit, using only a SKR and allow the gold not to be moved. Citibank in USA agreed to the terms and the funds were released to BCV.

Good job Nelson Merentes!

Read article.

Venezuela pawns nearly $1 billion in gold reserves.

By: Chris Powell, Secretary/Treasurer, GATA

By Blanca Vera Azaf
El Nacional, Caracas
Friday, April 24, 2015

www.el-nacional.com/economia/BCV-empeno-oro-reservas-millardo_0_6...

The Central Bank of Venezuela has pawned nearly $1 billion of its gold reserves, sources close to the central bank say. The swap operation, as it is called in the financial markets, was signed with the US bank Citibank, which was chosen from a group of five international organizations, which also aspired to structure this financial instrument.

Although details of the operation are unknown, experts have estimated that the US bank will charge a fee of between 6 and 7 percent for preparing the swap. The gold remains in the vaults of the Bank of England. But it would be taken as collateral in case the Central Bank of Venezuela does not pay on time the amount borrowed from Citibank.

It was thought that the swap's value would be $1.5 billion, but in the end a lower figure was achieved. The funds will be used to pay for imports, an unofficial source said.
International firms have calculated that in 2015 the Venezuelan government's fiscal deficit could reach $25 billion. So far the government has chosen to cover part of this deficit by printing money without gold backing. This has caused an inflationary spiral that according to experts will put inflation in three digits.

Although the central bank did not formally announce the swap, information about it has filtered through international markets. This contributed to the rebound in oil prices in the world market.

On average, Venezuelan bonds rose between 3 and 4 percent, a percentage which is important considering that when a bond rises more than 1 percent in a day it is considered out of the ordinary.

Investors who have bonds of the republic or state oil company welcomed the swap, because they see the government closing its foreign exchange deficit, a source close to the financial sector said.

[niseag]

www.blacklistednews.com/Citibank_Buys_%241Billion_in_Gold_From_Venezuela/43705/0/38/38/Y/M.html

[UKIPA Holdings,LLC]

Great read, niseag.

Thank you.

P.I.

[anenro]

UPDATE:

BCV is about to pledge $8B in gold to obtain funds to pay for debt to mature at the end of 2015.

Stay tuned folks.