Venezuelan debt instruments rally on expectations of political change

In an environment where investors are betting on a political change in Venezuela, due to the health problems of President Hugo Chávez and the strengthening of the opposition, the price of the Venezuelan bonds traded abroad have hit record highs.

Venezuela's benchmark bond due in 2031 ended the day at 86.5% of its nominal value whereas the Global 22 ended at 95.6%. The price of Global 26 (87.65%) and Pdvsa 2022 (87.75%) also rose.

If the current increase in bond prices persists, both the Ministry of Finance and state-run oil giant Pdvsa will be able to sell new instruments at a higher price and lower interest rate.

There are other causes behind the increased price of Venezuelan bonds: "declining risk aversion related to a possible solution of the crisis in the eurozone, and encouraging economic results in the US, as well as high oil prices," said Henkel García, director of economic research firm Econométrica.

vsalmeron@eluniversal.com