Evrofinance Mosnarbank – no, that's not a Maracucho name


Ever heard of Evrofinance Mosnarbank SA? Me neither…which is funny, considering – as Daniel Cancel documents in this lovely in-depth report for Bloomberg – it has recently displaced Citibank and Credit Suisse Group to become the number-one underwriter of Venezuelan sovereign bonds.

Just this year, they’ve handled $3.6 bn worth.

Who exactly owns it? Funny you should ask because no one really knows: one reason Moody’s gives it a crap Ba3 long term rating and has it on a watchlist for further downgrade. We only know the mamotreto is based in Russia, but most of the capital seems to be Venezuelan – public sector Venezuelan, at that – and that it doesn’t seem to underwrite anybody else’s bonds.

Long story short, the rrrrregimen has figured out a way to be its own bond underwriter, charging itself gawdonlyknows what fees to provide itself that service.

As though the first post-transition Contralor General de la Republica didn’t have a full enough plate as it is…

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  1. Well, I do. I have written a few posts on this, like

    Now: is that Emilio Junior Farías López (representative in Caracas) related to any of Chávez’s honchos?

    Pretty serious Kommersant, for instance, wrote Fonden will be using such a bank primarily for carrying out the weapon transactions, which have amounted to about 7 billion dollars so far with Russia alone and is due to increase with the 4 billion dollar loans Chávez recently got.
    Notice Venezuela got 49.99% of the shares only.

    Vladimir Putin had been pressurizing Venezuelan honchos to get along and get involved in that bank as a way of easing up business with the Russians. Medvedev did the same in 2008 during one of Hugo’s frequent visits there. After former KGB Igor Sechin went recently to our Land of Grace and Venezuela promised to invest more in that bank, our nation got that loan.

    Not for nothing Viktor Bout was recommending Venezuela’s bank system to the fake FARC agents back in 2008 in order to proceed with payments.

    If you were the son of a Venezuelan high ranking apparatchik and you had to invest your hard-earned Bolívares in some place, would you go to the Bank of America? Now you have another option!

  2. If I’m associated with Chavez and associated with Russians, I would not put my money anywhere it that it could be touched by the rule of law. Russia would be the obvious place.

    • That works for a time. When the regime falls, who is to stop the same lawless Russians from sending the thieves packing with nothing to cover themselves with?

  3. OT: There will be debates in the primary.

    This monday all candidates will talk at UCAB auditorium in an event organized by the student movement. The host will be Cesar Miguel Rondon and it will be focused on three themes: Employment, security and education.


    Apparently, Venevision is preparing a second debate to be held on December 4th, according to twitter account VVPeriodistas, related to journalists of that network.


  4. 1) You’re not reading VenEconomy. Evrofinance Mosnarbank, S.A. is a Russian (51%)-Venezuelan(Fonden, 49%)joint venture organized earlier this year.
    2) It has been acting a “coordinator” of the bond issues, not underwriter. (which earns a fee, but suppossedly less than an underwriting fee).
    Robert Bottome (VenEconomy editor)

  5. When this house of cards finally collapses there will not be enough forensic accountants in all of Latin America to trace what happened to all the money.

  6. Hehehe, count the days until a “Evrofinance Mosnarbank Montiel Chumaceiro” shows up!

    On a more serious note, it is easy to see what they are doing with the bank: Credit Suisse or Deutsche Bank are doing the heavy lifting (that’s why the are the supposed “lead” managers) and Evrofinance va pegao ahí. And the fees are split evenly, 50% for Credit Suisse or Deutsche, 50% for Evrofinance.

    As for the magnitude of the fees, the fee for the Venezuela 2031 bond was something around 29 bps (you can deduct it from the prospectus), and I would guess the fee for the 2026 was something similar (in comparison, when PDVSA issued the 2017/2027/2037 bonds, they paid 19 bps). It is a high fee, but you can always make a case that it is more difficult to issue a bond in 2011 than in 2007. And of course it nowhere near the 1.5% fee that Unovalores charged Electricidad de Caracas in 2007 for “facilitating” the swap of old bonds for new ones.

  7. Just slightly off topic- this Ayn Rand quote reminds me of Chavez and the wealth of Venezuela:
    “Run for your life from any man who tells you that money is evil. That sentence is the leper’s bell of an approaching looter.”


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