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  • larry_dalliapoulos larry_dalliapoulos Mar 4, 2011 1:33 AM Flag

    Venezuela investment vehicles

    Anyone know any Venezuela investment vehicle available from Unites States? Whether it's ETFs, open/closed funds, bonds, whatever. Any industry, not just oil. Also curious what you know about that particular vehicle, have you ever used it, etc. Did a little searching but came up with squat. Much obliged in advance.

    By the way, is the oil company CITGO more of a US company than Venezuelan?

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    • Citgo is owned 100% by Pvdsa, Venezuela's national oil company.

      There is no stock that can be bought on an American exchange right now. Chavez has pretty much nationalized or screwed anyone investing in a private industry operating in Venezuela.

      Venezuelan bonds with maturities in 2014, 2027, and 2034 are the only investments that are worth buying. I have lightened up on these and only own the 2034 ones now. CUSPID on this bond is 922646BL7. They are selling for $680, and they yield around 14%.

      I have bought these bonds in the $500 to $700 range three years ago because I thought the chances Venezuelan would go broke was unlikely. At that price and with the reimbursement usually given with default, I felt comfortable buying.

      I can't say at this price I would feel good buying these bonds now even with oil where it is. The ace in the hole for bondholders in case of default was suing for the U.S. assets Citgo owns. Chavez is looking at selling Citgo now.

      Inflation, crime, and unemployment are now all through the roof. Chavez has singlehandedly destroyed the economy. Even with his controlling all the levers of power, I am not sure Chavez would win re-election today.

      If these bonds hit $500, then maybe I will be interested again, but at $680, they aren't worth the risk.

    • The closest you can get might be Nicaragua by using the Firebird Global 2 fund. Firebird has some interesting funds in out of the way places.

      http://fbird.com/funds/?fid=10

      You could also just by HNR to get Venezuelan exposure. I would play it safer with a Firebird fund....but that's just me.

    • I would not invest in Venezuela . Period.

 
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