BofA Says Chavez Defeat Bets Are Overdone in Bond Market
This article is for subscribers only.
Bank of America Corp. recommended selling Venezuelan bonds, saying that their rally shows investors are overestimating the chances that President Hugo Chavez will lose this month’s election.
Bank of America cut Venezuelan bonds to underweight two weeks after JPMorgan Chase & Co. lowered the country’s debt to marketweight from overweight. Bank of America told clients to sell dollar bonds due in 2028 and 2034, saying they’ve become expensive. Yields on the bonds due 2028 have plunged 2.25 percentage points since the end of June to 10.62 percent and touched a four-year low of 10.54 percent yesterday.