Elecar Bonds Due in 2018 Rally Most Since March: Caracas Mover

Bonds sold by Venezuelan state-owned utility Electricidad de Caracas rallied, pushing yields down the most since March 19, as investors sought the highest yield in Venezuela.

Yields on the 8.5 percent bonds due in 2018 fell 53 basis points, or 0.53 percentage point, to 14.76 percent at 3:19 p.m. in Caracas, according to data compiled by Bloomberg. The bond’s price rose 1.64 cent to 77.04 cents on the dollar.

“Elecar offers the highest yield in Venezuela and is the farthest outlier on the Venezuela curve at over 14 percent,” Russ Dallen, the head bond trader at Caracas Capital Markets in Miami, said today in an e-mail. “It is being drawn back down toward the curve.”

Elecar rose the most today among bonds issued by Venezuela’s government and state oil company Petroleos de Venezuela SA as investors turned to higher yielding assets, said Dallen. The bonds, with $650 million outstanding, have returned 37.2 percent this year, outpacing the 31.5 percent return this year for Venezuelan government dollar debt.

Electricidad de Caracas, which sold the bonds in 2008 after being nationalized by the government in 2007, is rated B by Standard & Poor’s, compared to Venezuela’s B+ rating.

To contact the reporter on this story: Nathan Crooks in Caracas at ncrooks@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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