From Stuart Culverhouse at Exotix Partners…We upgrade our view on the Venezuelan oil warrants to BUY from HOLD. This is based on our updated calculations for the upcoming payments. The warrants are indicated at US.25 mid-price basis (cob 14 February).Warrants holders can receive payments twice a year if certain conditions are met. Each payment is however capped at a maximum of US per warrant. There are potentially seven more payments left over the life of the warrants for a maximum amount of US. The next payment is due on 15 April.We do not expect a payment on the warrants in April, but we are becoming more confident about payments in October 2017 and April 2018.More on this is available in the usual place.These things — formally known as Value Recovery Rights — date from when Venezuela issued Brady bonds back in 1990 to cover defaulted debt. The bonds are long gone, but a number of the warrants remain outstanding. We assume they are not very liquid. Buyer beware, yeah? Copyright The Financial Times Limited 2016. All rights reserved. You may share using our article tools.
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From Stuart Culverhouse at Exotix Partners…