Crystallex International

Latin American Herald Trbune

Caracas,
Tuesday
October 16,2012

By Nathan Crooks

CARACAS -- Venezuela bonds rallied the most in two months after President Hugo Chavez named a new vice president yesterday, putting longtime foreign minister Nicolas Maduro in line as a possible successor.

The yield on Venezuela’s benchmark 9.25 percent securities due in 2027 fell 27 basis points, or 0.27 percentage point, to 10.79 percent at 10:48 a.m. in Caracas, according to data compiled by Bloomberg. The bond’s price rose 1.78 cent to 88.68 cents on the dollar.

Venezuelan bonds plunged the most in four years on Oct. 9 after Chavez’s re-election over the weekend fueled concern he will extend government controls that have deterred investment.

Bonds are seeing a “technical bounce back” as worldwide yields tighten, Russ Dallen, the head bond trader at Caracas Capital Markets, said today in an e-mail.

“The fact that Chavez has made this change means that he is setting up a plan for continuance and is an indication that his health is continuing to falter,” he said.

Venezuelan dollar debt has returned 27 percent this year through yesterday, the most in Latin America, on speculation Chavez, 58, would lose the vote or succumb to a two-year cancer battle, handing power to a government that would roll back his economic policies. Chavez has said he is cancer free. Bloomberg