CARACAS, Friday February 08, 2008 | Update
Venezuelan debt bonds Friday extended losses in Europe trading,
following reports that US and British courts moved to freeze
Venezuelan oil giant Pdvsa's assets at a value of USD 12 billion,
Venezuela's benchmark global bond due 2027 plunged to unprecedented low levels in five and a half months.
Venezuela's part in the Emerging Markets Bond Index Plus (EMBI+) -measuring risk in emerging markets- climbed 26 points to 547 base points above the comparable yields of the US Treasury Bonds.
Overall, EMBI+ was gaining only four base points.
Venezuela's 2027 bond was losing 2.6 points in price to bid at 96.313, while yields soared more than 30 base points to 9.6 percent -the highest level since August last year.
Venezuela's five-year Credit Default Swaps -the bilateral contracts under which the risk of default is transferred from the holder of the fixed income security to the seller of the swap- were trading at some 540 base points -their highest level since mid-2004, according to traders.
The court order to freeze Pdvsa's accounts and assets ignited fears among investors that Venezuelan President Hugo Chávez could take reprisals.
"Given the unpredictable nature of Chávez's government, volatility is likely to further hit these titles," said Paul Timmons, a bond trader with Commerzbank in London.