Venezuela’s New Devaluation Positive for Bondholders, BofA Says

Venezuela’s second devaluation in less than two months is positive for bondholders as the government looks to narrow a fiscal deficit fueled by a pre-electoral spending spree last year, Bank of America Corp. said.

The system of dollar auctions announced yesterday will enable the government to buy bolivars for less than the official rate of 6.3 per dollar, Bank of America analysts Francisco Rodriguez, Jane Brauer and Flavio de Andrade said in an e-mailed report. Venezuela last month devalued the bolivar by 32 percent to close the 2012 fiscal deficit estimated at 11 percent of gross domestic product by Moody’s Investors Service.