Investments in Venezuela come with plenty of political risk, but that risk may already be priced in, making it a better deal than countries where risk is growing but not yet reflected in bond yields. Societe Generale analyst Régis Chatellier thinks it’s a good time to shift investments from the Ukraine to Venezuela to take advantage of a spread that looks like it will narrow.
Venezuela and Ukraine ratings
“We recommend buying the Venezuela $2026 and selling the Ukraine $2023 on a cash neutral basis. We expect the spread between the two bonds to narrow by 150bp in the next three months,” writes Chatellier. With former Venezuelan President and strongman Hugo Chavez recently deceased, there is still a...
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