| How Petrocaribe Debts Are Sold |
| Fri, December 12, 2014 |
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| And keeping the discussion on big money matters - we turn back to Petrocaribe. As we've reported Venezuela may be forced to sell some of its Petrocaribe debt to Investment Banks in the US. That's a process called securitization and our colleague at the Nationwide News Network in Jamaica Kalilah Enriquez asked international banker Aubyn Hill to explain how securitization works - and how it will help Venezuela out of its short term cash flow problems - while not changing the terms of the debt commitment that debtor nations have:
Aubyn Hill
"Where Goldman makes its money, it says look, you have this debt on your book at $100, I am going to buy it from you at 40% discount which I think is exactly what Goldman has offered and so instead of you have 100 million dollars because its impaired and I don't know what is going to happen in the future and you need the money badly - I'll give you today 60 million dollars and will be maturing in 10-15 years whatever state of maturity is. When its purchase you can come to Jamaica and say look this thing say 15 years. If you pay me in 10 years and instead of taking 100 million dollars from you, I will take 70-75. In other words they make a cool 15 million dollars and turn around in two months. Jamaica now get a benefit of paying only 75% for the debt that it owed."
Next week, we'll continue our conversation with Deputy Chair of Alba Belize Petrocaribe Limited John Mencias - as he explains how Belize's debt servicing to Venezuela is structured and when it kicks in..
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