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Venezuelan PDVSA Bonds Downgraded Again amid Default Worries

By: Sabrina Martín - @SabrinaMartinR - Sep 20, 2016, 11:54 am
pdvsa-bonos
S&P expects the oil company to default on its loans (runrun)

EspañolStandard & Poor’s has downgraded the credit rating of oil company Petroleos of Venezuela SA (PDVSA).

In a statement, the financial company said it lowered the corporate credit rating (from CCC to CC) of Venezuela’s state oil company for being vulnerable and untrustworthy.

The new rating corresponds to risky investments, the statement also said. S&P officials said they believe PDVSA is “highly vulnerable, with a high speculative level.” They also it said there is little prospect that PDVSA will recover before an imminent default.

Though Venezuela is still complying with payments, the rating agency’s officials said it expects PDVSA to default.

PDVSA recently announced new conditions for voluntary exchanges of bonds that would meet its owed debt through 2017.

PDVSA has a bond-swap deal starting September 29 in which $950 of securities will be paid per $1,000.

“The oil and gas company of Venezuela PDVSA announced a debt exchange offer,” the S&P statement said. “We see it as a sign of difficulties if completed. Under the proposed transaction, the company would exchange its senior unsecured bonds 5.25 percent and 8.5 percent due 2017 for new bonds to 8.5 percent due in 2020.”

Similarly, the US company said the completion of the bond exchange offer will reduce the corporate credit rating to “SD” and senior issuance bonds to “D” again.

On Monday, September 19, bonds with state oil opened lower after PDVSA announced a voluntary debt swap of about US $ 7.1 billion

Sabrina Martín Sabrina Martín

Sabrina Martín is a Venezuelan journalist, commentator, and editor based in Valencia with experience in corporate communication. Follow @SabrinaMartinR.

Is Sexism All There Is to Wage Inequality?

By: María Marty - @mariamarty16 - Sep 20, 2016, 10:05 am
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Novak Djokovic, the world's top tennis player in the ATP ranking, spurred controversy a few months ago when he claimed that male players should earn more than their female counterparts. To this, Serena Williams, No. 1 in the ranking of the Women's Tennis Association responded: If I have a daughter who plays tennis and also have a son that plays tennis, I wouldn’t say that my son deserves more because he is a man. If they both started at three years old I would say they both deserve the same amount of money." So is it fair that the world's best female tennis player earns less than the No. 1 male player? I answer by analyzing the case of Brazilian supermodel Giselle Bündchen. While she makes about US $40 million a year, Sean O'Pry, the top male supermodel, earns only about $1.5 million. And so far, male models have not complained about this. What Serena Williams and others seem to ignore is that what determines how much people should earn is not the effort involved, the age at which they began to work, nor any entrepreneur's whim or machismo. What determines someone's wages are consumers and their preferences. When Djokovic, Andy Murray, Roger Federer or Rafael Nadal play, they attract more people than Williams, Angelique Kerber, Garbiñe Muguruza or Agnieszka Radwańska. And when Bundchen, Adriana Lima and Alessandra Ambrosio walk across the Victoria's Secret catwalk, the world stops. People simply do not react the same toward a male fashion show. In the same vein, millions of eyeballs focus on TV screens when Usain Bolt is about to run, but few remember the name of the fastest female athlete. Similarly, Argentinean soccer star Lionel Messi is immensely more popular than Carli Lloyd. This is not about pitting one gender against the other, as Serena suggested. It is about respecting people's choices of who they want to pay for their services. Wage inequality is everywhere, and reducing all disparities to sexism is a mistake. The best football team in the United States earns more than the best rowing team, simply because people consume more of it. If we apply Serena's criteria, and had the members of both teams struggle the same, had them start to train at the same age, they should all earn the same, right? Why do we only compare men and women who dedicate themselves to the same activity? Serena's mistake is that she assumes there is a preexisting money bag to distribute, and one distributed unfairly. That bag is filled with money from the people who buy tickets to see their favorite players, or with money from sponsors who invest in athletes knowing that people will pay to see them. In the case of tennis, men generate greater attraction than women. In a free market economy, what you earn depends on how the market values what you offer. If we do not like how the market responds to what we offer, we can try to change people's opinion by promoting our activity, or by improving our offer to make it more attractive. What we cannot do is to impose our values to the rest, forcing them to become fans of rowing, attend fewer football games or to prefer Radwanska over Federer. Likewise, we cannot lobby for such results to be distributed equally when they were not generated as such. googletag.cmd.push(function() { googletag.display('div-gpt-ad-1459522593195-0'); }); Are there certain injustices? Are some women who exercise their profession much better than their male colleagues not receiving the promotion or a raise they deserve? Yes, of course. Perhaps the person who makes the decisions is a sexist man afraid of potential pregnancies, or a man that feels threatened by an intelligent woman. In situations like this, we can try to make this person realize his mistake, or suggest a good psychologist. We can express our disagreement to him, or even quit the job if we cannot tolerate it anymore. The scales of value are personal and subjective. Each person values what, at some point, gives them more satisfaction, consciously or unconsciously. If we want to compete for the public's preferences, we must offer something so that they will choose us over others. This is not about beating or matching the other through lobbying and artificial distribution. This is about offering the best we have got, playing fair and accepting the verdict of the jury, which in this case, is the consumer. On the other hand, if as consumers we believe that female tennis players deserve to earn the same as male players, we must attend more of their games. If we believe that male models should earn more, we have to buy more tickets for their shows. If we believe that a researcher should be richer than Messi, we must stop watching his games, and invest our money into a research center. We must realize that our choices fill or empty the coffers of others.

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