September 9, 2004
Moody's upgrades Venezuela rating
By Ivar Simensen in London
(Financial Times) - "Venezuelan government bonds rose after Moody's Investors Service upgraded the oil-rich Latin American country by two notches, citing the government's determination to service its debt in full. The credit rating agency said the upgrade reflected Venezuela's commitment to service its public debt, the country's strong financial reserves and decreasing political risk.

The market reacted positively, sending prices on Venezuelan bonds higher and yield spreads tighter. The 10.75 per cent September 2013 bonds rose to 109.75 of face value from 108.7 on Monday.

The bonds have been rising over the summer as high oil prices have boosted the world's fifth largest crude exporter. The bonds received another boost in August when Hugo Chávez won a referendum on his presidency, which will keep him in office for another two years.

'The only element that changed since the beginning of the year is political risk,' said HSBC's emerging markets strategists in a research note. 'Chávez's victory appears to be setting the stage for a decrease in political risk ... This, in turn, has improved the outlook for the credit, especially given current oil prices.' (…)
Moody's upgraded Venezuela to B2 from Caa1, leaving the rating five levels below investment grade. The upgrade brought the rating in line with that of Standard & Poor's, which raised its Venezuela rating to Double B two weeks ago."