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Citigroup says Venezuela deal covered $1.6 billion in gold

Citigroup Inc. said it entered into a financing deal with Venezuela’s central bank in 2015 essentially using $1.6 billion of gold held at the Bank of England as collateral.

A subsidiary bought the precious metal up front, taking full legal ownership under a contract that requires Venezuela’s central bank to periodically buy back portions at predetermined dates, Citigroup said in a filing on Friday. The agreement became the subject of a Bloomberg report this week on the firm’s efforts to resolve the deal now that stiffer sanctions are in place.

Citigroup bankers have been holding talks with U.S. Treasury officials to figure out how to handle the deal, which was arranged with Nicolas Maduro’s regime before the U.S. stepped up sanctions on his government, Bloomberg reported Thursday, citing people familiar with the matter. They said the contract at issue covers $1.1 billion of gold.

“Citi always intends to comply with U.S. law and any applicable sanctions regime,” spokesman Mark Costiglio said in a statement after Friday’s filing.

Citigroup’s filing doesn’t specify how much of the original $1.6 billion contract is still outstanding. Venezuela’s central bank is required to make its next purchase in March, the company said, describing the amount as “significant.”

“Citi believes it is protected against market and credit risk related to the agreements,” the company wrote, describing the deal as a form of financing.

News No: 3747
Date: 2019/02/25 - 19:27
News Source: MINING.COM

Venezuela  gold  Bank of England  precious metal  Citigroup 

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