2024-06-10 11:00

HOUSTON, June 10 (Reuters) - Companies submitting bids through Tuesday in a U.S. court-ordered auction of shares in Citgo Petroleum parent PDV Holding must present proposals to pay holders of 2020 bonds issued by Venezuela state oil firm PDVSA. The court is auctioning shares in a parent of Venezuela's foreign crown jewel, Houston-based Citgo, that it found liable for the South American country's debts. The auction has drawn interest by several energy companies and investors and could result in a change of ownership of the refiner. The bondholders' claim adds a new twist to the long-running case in Delaware, first introduced by miner Crystallex against Venezuela, which has allowed 18 creditors to jointly seek $21.3 billion in compensation for expropriations and defaults. The holders, whose bonds were collateralized with a 50.1%-stake in one of Citgo's parents, PDV Holding, have been fighting in separate U.S. courts to have the bonds declared valid. They are seeking $1.9 billion in compensation. Their claim is poised to reduce the auction proceeds available to creditors, while securing the holders a compensation, even if not immediately. The bids will decide the fate of the seventh-largest U.S. refiner as soon as this summer. Proceeds from the auction may cover only about a third of claims cleared by the court, based on the highest offer in a first round in January. The judge's bidding instructions, updated in May, ask potential buyers using credit bids to say whether their offers include cash provisions to pay the 2020 bondholders, a filing showed. PRIORITY CLAIMS Citgo, ultimately owned by Caracas-headquartered state firm Petroleos de Venezuela (PDVSA.UL), has been valued at between $11 billion and $13 billion. But the highest offer in the first bidding round was $7.3 billion New Tab, opens new tab. The court years ago found Citgo parent, PDV Holding, liable for Venezuela's expropriations and debt defaults, bringing dozens of other creditors to press their claims. Judge Leonard Stark has said the sale process might be completed in July, but an authorization from the U.S. Treasury Department will be needed to award the winner. Venezuela has asked the U.S. to pause the auction until elections in that country next month. The judge last year gave priority to miner Crystallex, who introduced its claim in Delaware in 2017, to cash some $990 million. A $72 million claim by offshore service provider Tidewater (TDW.N) New Tab, opens new tab has second-highest ranking. Oil producer ConocoPhillips (COP.N) New Tab, opens new tab secured a position near the front of the line to cash a $1.33-billion claim, one of the three awards totaling more than $10 billion the company has registered. Also near the top of the list are glass maker O-I Glass (OI.N) New Tab, opens new tab, Huntington Ingalls Industries (HII.N) New Tab, opens new tab, ACL Investments, Red Tree Investments, Rusoro Mining (RML.V) New Tab, opens new tab, a second, $48.1 million claim by Conoco, and units of Koch Industries. BIDDERS AND MARKETERS The U.S. court has kept most of the bidding rounds' details confidential, including bidder names. It last year hired investment banker Evercore Group (EVR.N) New Tab, opens new tab to market Citgo's assets, which include three refineries, terminals and pipelines. Evercore and court official Robert Pincus are expected to begin reviewing and ranking the bids as soon as Wednesday, people close to the process said. They may seek clarification from bidders before presenting them to the court. Bidders are expected to include top investors and energy companies. Activist investor Elliott Investment Management has been weighing a bid for the shares, while a group of creditors represented by financial firm Centerview Partners was aiming to lure Conoco to join another offer, sources told Reuters in April. Conoco and Elliott were among 12 groups that submitted indications of interest during a first round in January. Refiners Koch Industries and PBF Energy (PBF.N) New Tab, opens new tab also are weighing offers. The arrival of at least two groups with substantial resources and experience in corporate restructurings has increased the likelihood of an ownership change for the century-old refiner. Citgo's smallest and least profitable refinery, in Corpus Christi, Texas, recently has been thrust into the spotlight as a potential breakout candidate ahead of the final bidding round. Producers, refiners and investment funds increasingly have shown interest in that asset. Sign up here. https://www.reuters.com/business/energy/which-creditors-will-have-priority-citgo-share-auction-2023-07-27/

2024-06-10 10:20

A look at the day ahead in U.S. and global markets by Samuel Indyk The expected rightward shift in the European Parliament after a four-day election has still managed to jolt European markets as gains for the far-right in France prompted French President Emmanuel Macron to call a snap parliamentary election. French bonds and stocks were sold off while the euro dropped as political uncertainty had investors heading for the exits. French banks were some of the hardest hit, with BNP Paribas (BNPP.PA) New Tab, opens new tab, Credit Agricole (CAGR.PA) New Tab, opens new tab and Societe Generale (SOGN.PA) New Tab, opens new tab all tumbling between 4.5%-7.4%. It's a big negative shift after what had been looking like a more positive outlook for Europe. The European Central Bank last week began lowering borrowing costs after its steepest ever tightening cycle, inflation has been drifting back towards target and surveys have indicated growth may have bottomed. In contrast, the Federal Reserve looks like it could refrain from cutting interest rates until the fourth quarter, growth appears to be shaky - albeit after more robust growth at the start of the year - and inflation looks stickier. So as global investors had been warming to European markets, the election results and heightened political uncertainty may bring about a shift in sentiment. At least for now, that's evident. France's main CAC 40 stock index (.FCHI) New Tab, opens new tab was down 1.9%, dragging other European markets lower. Germany's DAX, Britain's FTSE 100, Spain's IBEX and Italy's FTSE MIB were all off between 0.4%-1%. Yet U.S. futures were relatively unperturbed. E-mini S&P futures are down around a quarter of one percent, while futures on the Nasdaq are lower by a similar amount. French bonds are similarly as unloved as the equity market. The spread between France and Germany's 10-year yields, a gauge of risk premium investors seek to hold French bonds over German paper, widened over 6 basis points. The euro was down 0.4% against the dollar to its lowest level in a month. The U.S. day looks quieter but with U.S. CPI figures and the conclusion of the Fed's June meeting on Wednesday, the week is not expected to stay that way for long. Markets are pricing with near certainty that the Fed holds rates this week while a July cut has been almost completely ruled out too. September is now just a 50/50 shot. A shift in tone from the Fed this week or softer CPI figures could once again have markets betting on more than one rate cut this year. Key developments that should provide more direction to U.S. markets later on Monday: * U.S. employment trends data * U.S. to sell 3- and 6-month bills, 3-year notes Sign up here. https://www.reuters.com/markets/us/global-markets-view-usa-2024-06-10/

2024-06-10 08:36

BERLIN, June 10 (Reuters) - Investor morale in the euro zone rose for the eighth consecutive month in June, but economic recovery in the bloc is proceeding with difficulty, a survey showed on Monday. Sentix's index for the euro zone rose to 0.3 points for June from -3.6 in May. Analysts polled by Reuters had expected it to rise to -1.8 this month. Importantly, the index on expectations saw a rise, increasing from 7.8 in May to 10.0 in June, "providing some encouragement that the trend may continue in the coming weeks", Sentix said. "Germany's economy would have to send out a signal to generate more momentum. However, this signal has yet to materialize," it said. The barometer plunged into negative territory in the wake of Russia's invasion of Ukraine last February. The sluggish improvement since then "is certainly one of the main arguments for the ECB to be able to cut interest rates further", Sentix said, adding that its inflation barometer also indicates an unfavourable inflation environment. Germany's economy, Europe's largest, saw some improvement in June, with the index on the current situation rising to -26.3 from -33.5 in May. "The stabilization of the German economy is only making moderate progress," Sentix said. The poll of 1,276 investors was conducted between June 6-8, Sentix said. Sign up here. https://www.reuters.com/markets/europe/euro-zone-investor-morale-rises-more-than-expected-june-2024-06-10/

2024-06-10 07:57

LONDON, June 10 (Reuters) - Investor demand to hedge risk in the euro around the snap French vote surged on Monday, after President Emmanuel Macron stunned markets with his decision to call a parliamentary election following wins by the far right in a European Union vote. Options volatility, a measure of demand for protection, on contracts expiring on July 1 neared 6%, its highest since early May . Three-month vol , considered the benchmark, rose to its highest since May 15, touching 5.688%. The first round of the French parliamentary election will be held on June 30. A separate measure that reflects demand for options to sell the euro against the dollar fell to its lowest since late April. Three-month risk reversals, which reflect demand for buy, or sell options on the euro, hit -0.64%, suggesting investors are at their most euro-bearish since the end of April . Macron's party was trounced by Marine Le Pen's far-right National Rally (RN) party in Sunday's election, battering French markets and shares in the country's major banks in particular. The euro fell broadly on Monday, tumbling to a one-month low around $1.0748 against the dollar, and to a 21-month trough against sterling , at 84.53 pence. "Today euro/dollar may well have another leg lower to the $1.0700/0720 area once U.S. investors fully have a chance to appreciate events in European politics," ING strategist Chris Turner said. Sign up here. https://www.reuters.com/markets/currencies/investors-scramble-hedge-euro-risk-around-snap-french-vote-2024-06-10/

2024-06-10 07:23

FTSE 100 down 0.2%, FTSE 250 off 0.5% M&G Plc up after JP Morgan upgrades stock to "overweight" UK wages, GDP figures due later in the week June 10 (Reuters) - UK stocks slipped on Monday, tracking losses in European stocks after French President Emmanuel Macron called a snap parliamentary election, while uncertainty around the timing of interest rate cuts in the United States also weighed. Britain's blue-chip FTSE 100 (.FTSE) New Tab, opens new tab closed down 0.2%, while the mid-cap FTSE 250 (.FTMC) New Tab, opens new tab fell 0.5% for a second straight session of losses. Political uncertainty in Europe made UK investors more cautious after Macron's decision on Sunday to call an election after a bruising loss in a European Parliament ballot. "The (election) injects a big dose of the uncertainty which markets hate – with the euro dropping sharply in response to the developments," said Russ Mould, investment director at AJ Bell. Most UK sectors ended lower, with beverages stocks among the worst hit (.FTNMX451010) New Tab, opens new tab, declining 2.1%, although energy stocks (.FTNMX601010) New Tab, opens new tab gained 1.2% as oil prices rose by $1 per barrel. "There's some (election) risk in the U.S. as well. So London finds itself caught between these markets, dealing with quite a lot," said Chris Beauchamp, chief market analyst at online trading platform IG. "The modest losses we're seeing is a relatively contained self. Given the strong forms of European markets, maybe we're just due a little bit of profit taking in the short term." Traders were also still assessing the impact of Friday's blow-out U.S. jobs report, which dampened hopes for a September rate cut by the Federal Reserve. The European Central Bank began its rate cutting cycle last week with a 25 bps trim. Investors now await Britain's wages and GDP data, due later in the week, to gauge the Bank of England's monetary policy path ahead of its next meeting this month. Among individual stocks, ME Group International (MEGPM.L) New Tab, opens new tab fell 4.9% after the instant-service equipment group said its full-year profitability was in line with expectations. Insurer and asset manager M&G Plc (MNG.L) New Tab, opens new tab bucked the downtrend, rising 2.4% and topping the FTSE 100 after JP Morgan upgraded its rating to "overweight" from "neutral". Sign up here. https://www.reuters.com/markets/currencies/british-equities-fall-ahead-slew-economic-data-2024-06-10/

2024-06-10 07:16

Nov 14 (Reuters) - U.S. energy sector mergers are set to close 2024 on a high note after a blockbuster 2023 when the total deal value hit a record $250 billion, as companies double down on efforts to augment their oil and gas reserves. Deals worth $12 billion were disclosed in the quarter ended Sept. 30, according to data from Enverus Intelligence Research, and in the first half of November transactions worth about $8 billion have been announced. The wave of deals has left fewer companies and assets on offer, while some announced combinations have been delayed, either by antitrust regulations or by contract arbitration challenges. Here is a list of major deals in the U.S. oil and gas sector so far this year: These are some of the biggest deals announced in 2023: Sign up here. https://www.reuters.com/business/energy/us-energy-sector-consolidation-extends-into-2024-2024-06-10/