BancTrust Recommends Buying Electricidad de Caracas 2018 Bonds
March 15 (Bloomberg) -- BancTrust & Co., a Caracas-based brokerage, recommended investors buy Electricidad de Caracas bonds maturing in 2018 for their attractive yields and similar credit ratings to state oil company Petroleos de Venezuela SA, or PDVSA.
“We think there are sufficient reasons to take long positions on the bonds,” BancTrust’s head of strategy and research, Alberto Cardenas, said in a report today. “The bonds have the same credit rating as PDVSA, meaning that in general terms we’re taking about the same risk.”
Venezuela is preparing to spend as much as $6 billion this year to install thermoelectric power generators as a severe drought cuts water levels at reservoirs that supply hydroelectric power to the South American country, threatening to cause a total collapse of the power grid. Electricidad de Caracas, which was nationalized in 2007 from U.S.-based AES Corp., stands to benefit from the investments, Cardenas said.
The price on Electricidad de Caracas’s 8.5 percent bonds maturing in 2018 was unchanged today at 62.28 cents on the dollar and the yield was 17.4 percent, according to Bloomberg data.
The bonds may rise to 70 cents on the dollar in the next four months, Cardenas said in the report.
To contact the reporter on this story: Daniel Cancel in Caracas at dcancel@bloomberg.net.
To contact the editor responsible for this story: David Papadopoulos atpapadopoulos@bloomberg.net
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