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Repsol CDS Surge Continues

Tyler Durden's picture




 

By now everyone is aware of Argentina's disturbing plan to nationalize YPF over the protests of Spain, and soon EU. And as we noted yesterday, the equity value of YPF is essentially a doughnut as BofA stated, if somewhat more correct politically. YPF continues to be halted on the NYSE as per a T2 halt (aka "The news has begun the dissemination process through a Regulation FD compliant method(s).") and there is little availability for price discovery at the first derivative level. However, where discovery is ample is at the second degree, namely Spanish Repsol-YPF which is a majority owner of YPF, whose CDS continue soaring, and hit a whopping 391 earlier today, well over 100 bps compared to the Friday closing spread. For a massive energy production company this is a big move and we can only hope its Spanish bank shareholders are well insulated from mark to market losses, although somehow we doubt it.

 

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Tue, 04/17/2012 - 10:20 | 2351285 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The system is bankrupt, bitchez!

Tue, 04/17/2012 - 10:22 | 2351288 GeneMarchbanks
GeneMarchbanks's picture

La rebelión de las masas-- Ortega Y Gasset, you should really read it...

Spain is impotent, EU even more so.

Tue, 04/17/2012 - 11:19 | 2351524 Buckaroo Banzai
Buckaroo Banzai's picture

You wouldn't know it from the MSM, but Argentina has basically gone over the cliff in the last few months:

"Decadence in Argentina as it falls apart" http://www.themodernsurvivalist.com/archives/1971

"About to devaluate: Argentina restricts the purchase of Dollars" http://www.themodernsurvivalist.com/archives/1690

"And so it ends for Argentina" http://www.themodernsurvivalist.com/archives/1675

Tue, 04/17/2012 - 10:22 | 2351291 Ben Bermonkey
Ben Bermonkey's picture

New chatter is that the Chinese buy ypf first haha, rice oil!

Tue, 04/17/2012 - 10:42 | 2351357 A Nanny Moose
A Nanny Moose's picture

Sake!!!

Tue, 04/17/2012 - 10:21 | 2351293 Silveramada
Silveramada's picture

Global Insolvency!

Tue, 04/17/2012 - 10:34 | 2351333 Spitzer
Spitzer's picture

Im waiting.....

Can this start an AIG moment ? I am no CDS expert...

Tue, 04/17/2012 - 10:22 | 2351299 Everybodys All ...
Everybodys All American's picture

I'd expect more of this nationalization game plan to come.

Tue, 04/17/2012 - 10:34 | 2351327 GMadScientist
GMadScientist's picture

How dare they believe they should benefit from the development of their own natural resources.

Tue, 04/17/2012 - 11:05 | 2351457 machineh
machineh's picture

In 1993, Argentina sold YPF, believing that private owners would manage the natural resources better than the state.

Now the state is grabbing YPF back by extortion and theft.

Most oil exploration technology is North American and European. Shutting out international participation will dumb down YPF to a bloated, overpaid, and unsackable staff of valve turners, maintenance mechanics and royalty accountants, supervised by political hacks, presiding over the same steady slide in new finds and production that YPF exhibited pre-1993.

Imagine U.S. natgas production run by the post office. GOT FIREWOOD???

Tue, 04/17/2012 - 14:14 | 2352199 Omen IV
Omen IV's picture

How is Venezuela doing ?

Tue, 04/17/2012 - 10:24 | 2351302 scatterbrains
scatterbrains's picture

What happens if Argentina decides it's tired of fiat games and announces it will now only sell it's newly controlled resources pegged to a basket of hard assets.. gold etc ?  Yea I know never happen. 

Tue, 04/17/2012 - 10:48 | 2351377 A Nanny Moose
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Depends on whether we teach Iran a "lesson"

Tue, 04/17/2012 - 10:27 | 2351313 GMadScientist
GMadScientist's picture

What's the over-under on Kirchner taking a CIA bullet? Allende 2.0?

Tue, 04/17/2012 - 11:33 | 2351586 Buckaroo Banzai
Buckaroo Banzai's picture

Don't be absurd. Argentina has been looted ruthlessly for over a century; at this point Argentina has at least a 10-year head start on where the rest of the world is heading. Kirchner is developing the next iteration of the model by which the PTB want to run the entire world. It is a case study in how to loot and demoralize an entire nation of people, who have been thoroughly socially conditioned to put up only the feeblest amount of resistance.

Tue, 04/17/2012 - 10:30 | 2351321 eigenvalue
eigenvalue's picture


China Petrochemical Corp. (Sinopec Group) is in talks to buy Argentine oil and gas company YPF S.A., a source close to Sinopec says.

Sinopec is negotiating with Repsol-YPF S.A., Spain's largest industrial company and the sixth-largest oil company in Europe by sales, on a non-binding agreement, the source said. The acquisition price was over US$ 15 billion.

Repsol-YPF S.A owns a 57.4 percent stake in YPF.

In early April, China National Offshore Oil Corp. (CNOOC) planned to buy Argentina's YPF for 9.16 billion euros, Spanish newspaper El Confidencial reported. But the source close to Sinopec said CNOOC was not involved.

Sinopec intended to acquire all the shares owned by Repsol, whose board of directors supported the deal, the source said. The deal would need to be approved by authorities in Spain and Argentina.


YPF S.A., the largest oil company in Argentina, was a state-owned enterprise in 1990s, but was later privatized. In recent weeks, the relationship between YPF and the Argentine government has been strained. The government headed by Cristina Fernandez de Kirchner has blamed YPF for a lack of investment in the sector, leading to shortages of refined oil.

Six Argentine provinces have withdrawn exploration licenses involving ten areas from YPF.

The official Xinhua News Agency reported that the Argentine government has told its congress that it aimed to buy a 50.1 percent stake in YPF, enough to be its controlling shareholder.

The Argentine government strictly controls oil prices, keeping them low and sapping the enthusiasm of oil firms. In addition, Argentina has imposed 40 percent tariffs on exported oil and gas. Earlier this year, YPF was in a dispute with the government over a US$ 8 million tax bill for natural gas export.
 
Sinopec sees huge potential in the oil blocks owned by YPF in Argentina and is confident it can meet the requirements of Kirchner's government to speed up exploration, a second source familiar with the situation said.

Tue, 04/17/2012 - 10:35 | 2351330 GMadScientist
GMadScientist's picture

"The deal would need to be approved by authorities in Spain and Argentina."

Nuff said.

Tue, 04/17/2012 - 10:40 | 2351349 gaoptimize
gaoptimize's picture

We all knew that resource nationalization would be part of the end game when commodities hit a certain level, right?

Tue, 04/17/2012 - 10:43 | 2351362 GoldenTool
GoldenTool's picture

It is going to be a couple of fun years watching the snake eat it's own tail to stay alive.

Tue, 04/17/2012 - 10:53 | 2351398 xela2200
xela2200's picture

It is just too funny. History just keep on repeating itself. When world powers loose their power, they loose their assets abroad. Spain lost its colonies, so did England. The US is next.

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