El Presidente Posted April 20, 2021 Share Posted April 20, 2021 Good article. Nothing too new but a nice revision of where they are. Before too many of us throw stones.....try googling up our own countries debt obligations As Castro Reign Ends, Cuba Is Mired in a Debt Debacle Once Again By Ezra Fieser April 20, 2021, 9:00 PM GMT+10 For a brief moment, Cuba appeared poised to return to international capital markets. It was late in the Obama era, months after the historic U.S.-Cuba rapprochement. And Raul Castro vowed to clear the debt the country had defaulted on decades earlier, a first step toward re-entering the world of global finance and securing the funding needed to revive a moribund economy. Six years after it restored diplomatic relations with the U.S., Cuba’s efforts at making peace with creditors have been derailed, and the island is as isolated as ever. The market for its old commercial loans is all but dead, and when they do trade it’s for just 10 cents on the dollar. That’s down about 70% from when optimism peaked in 2016. CONTINUED 1 Link to comment Share on other sites More sharing options...
mprach024 Posted April 20, 2021 Share Posted April 20, 2021 Debt? We don’t have any debt here sir. Link to comment Share on other sites More sharing options...
Nevrknow Posted April 20, 2021 Share Posted April 20, 2021 19 minutes ago, El Presidente said: Before too many of us throw stones.....try googling up our own countries debt obligations Amen! Seems lots of places view debt as an asset. Go figure. 🤷♀️ Link to comment Share on other sites More sharing options...
leebert Posted April 20, 2021 Share Posted April 20, 2021 Such a difference between Cuba and a reserve currency country - Cuba has to slog it out in a brutal market, arguably selling the island in the process, which leads to... another revolution? Reserve countries--US, China, Japan, Brits--have a whole different deal. Not sure, but is AUS considered a reserve currency in that part of the world? Link to comment Share on other sites More sharing options...
El Presidente Posted April 20, 2021 Author Share Posted April 20, 2021 Just now, leebert said: Not sure, but is AUS considered a reserve currency in that part of the world? The Pacific Peso (AUD) is the sixth most commonly held reserve currency – estimated to account for 1.8% of global reserves by value. 1 Link to comment Share on other sites More sharing options...
Nino Posted April 20, 2021 Share Posted April 20, 2021 Good article sum up : “Both sides know that the Cubans can’t pay anything,” said John Kavulich, the president of the U.S.-Cuba Trade and Economic Council, a New York-based researcher focused on the countries’ relationship. Link to comment Share on other sites More sharing options...
mprach024 Posted April 20, 2021 Share Posted April 20, 2021 1 hour ago, El Presidente said: The Pacific Peso (AUD) is the sixth most commonly held reserve currency – estimated to account for 1.8% of global reserves by value. But the Euro covers 40+ countries.....so it’s not REALLY 6th 😂 Link to comment Share on other sites More sharing options...
teamrandr Posted April 20, 2021 Share Posted April 20, 2021 Basically all of us are in debt Link to comment Share on other sites More sharing options...
leebert Posted April 20, 2021 Share Posted April 20, 2021 Just spitballing... So, some of these numbers are totally arb and could use a revision from people who know what they're talking about 😉 , but, if you assume: Cuba produces 260M cigars per year (pulled from Google - cited Halfwheel) ~25 cigars per box (not sure this is right, ties to 3 - ideally someone knows the contribution per cigar so we can skip the whole box thing) $50 cash contribution per box (pulled out of my ass - help, please - Rob?) 13 year term (~Paris Group current term, though, there's a bunch of qualifiers, I'm sure) ~6% discount rate (SWAGED - Paris Group default rate is 9%, and current haircut puts them ~1.5%, so pick a number... any public debt guys on this board?) AND (this is the big one because it will never happen) you give all Tobacco production over to a private entity who can run it the way they want, so one could squeeze through productivity improvements, pricing, yields, etc a 10% contribution improvement per year... A rational person would pay ~10B to have all Cuban tobacco production (actual number was $9.3B). Given the prestige of Habanos production, and that some investors would pay insane premiums to have a "piece of the leaf" (look at Pebble Beach pricing - "piece of the rock" multiples going on there IMO), I could see this value doubling. So, given Cuba is ~$20B in the hole (extrapolated from article Rob linked to), I could see a group taking over the sovereign debt in exchange for full tobacco ownership heh, you guys can stop laughing now... Link to comment Share on other sites More sharing options...
Vitola Corleone Posted April 20, 2021 Share Posted April 20, 2021 2 hours ago, leebert said: Such a difference between Cuba and a reserve currency country - Cuba has to slog it out in a brutal market, arguably selling the island in the process, which leads to... another revolution? Reserve countries--US, China, Japan, Brits--have a whole different deal. Not sure, but is AUS considered a reserve currency in that part of the world? Repeated defaults might also play a role in Cuba's situation. Link to comment Share on other sites More sharing options...
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