Bloomberg News

Venezuelan Bonds Fall as Chavez Returns From Cuba: Caracas Mover

December 07, 2012

Venezuelan bonds fell, pushing yields up from the lowest level since February 2008, after President Hugo Chavez broke a 21-day silence and returned from cancer treatment in Cuba.

The yield on Venezuela’s benchmark 9.25 percent securities due in 2027 rose 26 basis points, or 0.26 percentage point, to 9.43 percent at 10:12 a.m. in Caracas, according to data compiled by Bloomberg. The bond’s price fell 2.02 cents today to 98.58 cents on the dollar, the biggest one-day drop since Oct. 9. The yield tumbled yesterday on speculation that Chavez is too sick to complete a third term.

State-run Venezolana de Television broadcast images of Chavez waving and smiling as he came off a plane. The self- proclaimed socialist, who has seized companies and imposed currency and price controls during his 14 years in office, said he was “very excited” to be back in Venezuela.

“Venezuelan bond prices will stay high, even with the arrival of the president,” Alejandro Grisanti, a Latin America analyst at Barclays Plc in New York, said today by phone. “There has been a change in Chavez’s actions that lead one to believe that he is very sick. Even though he showed up on TV coming back to Caracas, he was still absent for three weeks.”

To contact the reporters on this story: Nathan Crooks in Caracas at ncrooks@bloomberg.net; Corina Pons in Caracas at crpons@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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