May 8 (Bloomberg) -- Venezuela’s benchmark bonds fell the most in four months after President Hugo Chavez said he will “immediately” use a new law to start seizing assets from oilfield services companies.

The yield on Venezuela’s 9.25 percent bonds maturing in 2027 surged 71 basis points, or 0.71 percentage point, to 14.73 percent at 9:55 a.m. in New York, according to JPMorgan Chase & Co. The bond’s price fell 3.5 cents on the dollar, the most since Jan. 8, to 65.25 cents.

The National Assembly approved the law yesterday, allowing for the nationalization of services including water injection at wells, gas compression and dock control. Chavez said last night he’d “start to recover these assets” and make them property of the government. Petroleos de Venezuela SA, the state oil company, is pressing foreign services companies to lower rates as growing debts hamper oil output.

“No one knew anything about this law, and that’s very negative,” said Barclays Plc analyst Alejandro Grisanti in New York. “All the region is rallying a lot. Venezuela is behind because of the news of nationalization of oil services.”

For Related News and Information: Venezuela economic snapshot: ESNP VZ <GO> Venezuela government bonds: VENZ <CORP> DES <GO> Venezuelan economy: TNI VENZ ECO BN <GO>

Last Updated: May 8, 2009 10:21 EDT