00:00So you've been waiting for this moment, I'm sure, Celestino. Can you tell us how long you've
00:04been investing in Venezuelan debt and a rundown maybe of the type of purchases that you've
00:09been making? Thank you, Bonnie, and thank you for having me here today. And good morning
00:16to you and to all these potatoes here. Yes, we launched Canaima Global Opportunity Fund
00:22in December 2020. And we has been a long conviction trade for us. We investing when
00:30there were sanction on the bonds and the second trading on the Venezuelan bonds. So it was only
00:38European investors could buy this. In fact, there was this opportunity for European investment
00:43to buy at the time. We bought as low as the single digit the bonds. But it's been a long
00:51ride. I tell you, it's not been for investment for faint hearted. And it's been a while
00:59been waiting for this. So this is a great opportunity for investors now. There's much
01:04clear path that we have now. There's no secondary sanction on the secondary trading on
01:12the bonds. So very excited for what's happened last weekend. And we have been speaking with
01:19all our investors. They're very excited as well. So JP Morgan anticipating that we'll see gains
01:24today and maybe in the next few days. How are you positioning yourself now given the events
01:30of the weekend? Are you waiting? Yeah. OK. So we've been buying all the way for the last few
01:36years. And then 2023 there's been removal of sanction of secondary market trading and the bonds
01:43already been going rallying. And since last year we've been because of this pressure maximum pressure
01:49of the U.S. administration on the on Venezuela within the bonds rallying with the expectation
01:55that something would happen to Maduro which did this weekend. And the removal of Maduro is the first
02:02step we think towards the negotiation with the U.S. administration. With Maduro was not possible to
02:11have any negotiation. It was not a counterparty reliable counterparty that the U.S. administration
02:17considers to have on the other side. With the removal of Maduro is opening up a way for for the U.S.
02:25company as President Trump mentioned this weekend to come into the country and create the cash flow
02:32for a potential restructuring. That's what the market was expecting. That's what the market was
02:36pricing already. Can you envision a debt restructuring happening under Delcey Rodriguez.
02:41It wouldn't exactly be a regime change. And that's what investors typically say needs to be done.
02:49Yeah. Definitely was not possible Maduro. There was no chance that with Maduro could have happened.
02:55Any type of restructuring. With Delcey we don't know yet. That's why when you asked before if we increase
03:03our position now I said we're happy with our position now. We are not increasing increasing yet. But we are
03:09monitoring very very closely these negotiations. We are we want to see how this pragmatic political negotiation
03:19will happen with that with that with that with that with that with that L.C. and the U.S.
03:23administration. They're going to go ahead. It seems that the U.S. are really and they're already willing to move
03:29ahead. They give a lot of concession. And the other side from yesterday discussion that we heard from the
03:35new point president. Yes. That's Rodriguez. We have we heard that there is willingness on the other side. If this is going to happen
03:44there will be clearly a path for a restructuring as early as this year. We think creditor government engagement is very key.
03:53And obviously a 60 billion dollar restructuring is quite complex. Do you anticipate that you're going to be able to have you know a bondholder
04:00committee. What does that look like. And can you engage with a Delcey Rodriguez government if that's what we get.
04:05Yeah. Yeah. All these questions that you just mentioning learning they're up in the air. Nobody knows. And we are watching very very
04:14closely. But the reality of the fact in that and what was our hypothesis investment hypothesis once we launched the fund in 2020
04:22and 2020 is that Venezuela is always being is always with being a sphere influence of the United States. And the bad here is that the big bad
04:32that Venezuela will go back in the Western financial system. If this is going to happen then there are sanctions are going to be
04:41removed. The investment bank they're going to flood in Venezuela. They're going to be tons of restructuring not only on the debt but also
04:49in the infrastructure. The whole economy needs to be rebuilt. So there will be tons of opportunity for investors if this is going to
04:55happen. Tell us you know how concerned are you that we might get a brief transition government and a new government taking over would actually
05:02repudiate the debt or make investors take major haircuts. This is this is something that we analyzed when with our legal
05:12team looking looking in the in the last few years. Repudiation is not really possible because it's not really it's not really a new
05:24country like like U.S.S.R. or or in Sudan. North Sudan. South Sudan. This is the same countries before. So there are no precedent for
05:32reputation. And we think this legal argument would not hold in any way the shape or form in especially in the in the U.S.
05:40courts. So the key here is in terms of haircut. How big is going to be haircut if and when. Now we're talking about the
05:47reconstruction which in the analyst estimate an investment that we're talking that is going to happen in the next five 10
05:54years is between now half a trillion to one trillion and the economy and the GDP of Venezuela can go from 90 hundred billion
06:02which is now to three four hundred billion and having a debt of under 40 150 160 billion which is going to be less than a
06:11half of net 50 percent of debt to GDP. Yes. I don't think it's going to be a big deal. So it's going to be we don't
06:20expect huge haircut and it's not it's a country and this type of country doesn't need a big haircut. What they need
06:29maybe is the extension of the debt some possibility to repay with warrants or warrants or shares in the
06:39privatization of companies. They're going to they're going to be a lot of instrument that can be given to investors to
06:47recover. Yeah. For the time span and repay the creditors. So tell us you know we did see JP Morgan adding back
06:54Venezuela middle to the end of last year after it looked like there might be some kind of action down there. I'm curious as to
07:01what you're seeing in terms of other banks and investment firms now jumping in on the action perhaps even you know placing
07:08people into Venezuela. Yeah. There'll be a lot of talk of people going there trying to see what are the
07:18opportunity investment. We have been called all this weekend from our investors and ask what what can we do. How can we
07:24invest directly in Venezuela. At the moment they are still sanctioned place. It's not this is not easy to invest directly
07:33but obvious obviously plays clearly. They are the real estate which is not sanctioned. This agricultural sector is not
07:42sanctioned. There is a leisure sector is not sanctioned. And also some part of the mining mining sector is not sanctioned. Coal for
07:48instance is not sanctioned in in in Venezuela. So we are analyzing all we're analyzing all these potential sectors. They are not
07:57sanctioned. And for our investors. And we see and we definitely we are we have shortly a pipeline of potential targets that we're
08:05analyzing. Just briefly just you know I mean you have a base case scenario. You say the most probable scenario is one of controlled
08:12confrontation and so on. But I'm curious are you looking at other countries now in light of what you think is the Trump
08:18administration acting on the Monroe Doctrine. And you think this could continue. Yeah. I mean the Monroe Doctrine has fairly
08:26announced has been a first applied Venezuela in 1900 and has been reaffirmed this weekend in in in Venezuela.
08:37Clearly the next target and when they get another opportunity could be Cuba. No there's still Cuba that in the London club has been
08:43a London hub. The city of London has been a hub of trading on Cuba debt for for for for for many years since when was the U.S.
08:51investors were banned to trade and investments in in the Cuban debt. So this is something that we are
08:56monitoring very closely and we already have some position but definitely something that we've been discussing. It could be a
09:03potential next target.
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