By Daniel Cancel - Feb 21, 2012 5:10 PM GMT+0100
Venezuelan bonds rallied on speculation President Hugo Chavez's health
is worsening after a columnist for El Universal newspaper said that he
may have traveled to Cuba for medical tests related to cancer.
The yield on Venezuela's benchmark 9.25 percent bonds due 2027 fell 6
basis points, or 0.06 percentage point, to 11.82 percent at 10:43 a.m.
in New York, according to data compiled by Bloomberg. The bond's price
rose 0.38 cent to 81.88 cents on the dollar.
Nelson Bocaranda, a columnist for Caracas-based El Universal, said
yesterday that Chavez traveled to Cuba to meet with a team of doctors to
decide whether to undergo a third operation after having a cancerous
tumor removed in June. Venezuelan Information Minister Andres Izarra
denied the report yesterday on his Twitter account.
"Rumors of Chavez being back in hospital for emergency surgery in Cuba
began to circulate among traders over the long weekend," Russell Dallen,
head bond trader at Caracas Capital Markets in Miami, said in an e-mail.
"The health rumor has put a bid under Venezuela bonds among those hoping
for regime change."
Chavez, 57, underwent chemotherapy treatment last year and has said that
he's "free of illness" as he prepares to run for re-election in October.
He hasn't revealed what type of cancer he had or released any medical
reports. He last appeared in public on Feb. 17.
Bocaranda also said on his Twitter account that Chavez's mother,
siblings and children traveled to Cuba to be with him.
Diosdado Cabello, the head of Venezuela's national assembly and a former
minister in Chavez's government, said speculation about Chavez's health
worsening was wrong.
"Don't pay attention to the rumors," he said today on his Twitter account.
State oil company Petroleos de Venezuela SA's bonds also rallied today
on the reports. The yield on PDVSA's 8.5 percent bonds due in 2017 fell
33 basis points to 12.20 percent, according to data compiled by
Bloomberg. The bond's price rose 1.21 cents to 85.09 cents on the dollar.
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