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6 Mar 2013
12. Forex Flash: Chavez’s death will not yield immediate effect in Venezuelan sovereign ratings – Deutsche Bank
It was announced that Venezuela's President Hugo Chavez had passed away overnight after a battle with cancer. Vice President Maduro will serve as interim president until the next election, which must be held within 30 days. According to Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “In a national address in December last year, Chavez reportedly called on Venezuelans to unite behind Maduro as his successor.”
In terms of the market reaction, Venezuela’s 5yr CDS were marked several basis points wider as were the yields on the country’s 2027 bonds – although confirmation of Chavez's passing first hit the wires after most US markets had closed. According to Moody's, the death of Hugo Chavez will not have an immediate effect on Venezuela's sovereign rating but the political transition will be key to any possible rating changes.
In terms of the market reaction, Venezuela’s 5yr CDS were marked several basis points wider as were the yields on the country’s 2027 bonds – although confirmation of Chavez's passing first hit the wires after most US markets had closed. According to Moody's, the death of Hugo Chavez will not have an immediate effect on Venezuela's sovereign rating but the political transition will be key to any possible rating changes.