Rumors of Hugo Chavez’ failing health rallies Venezuelan bonds

How loved is Venezuelan dictator Hugo Chavez in his own country? So loved that rumors of his failing health and possible demise in the near future have spurred a rally in Venezuela’s bond market:

Venezuelan Bonds Rally on Chavez Health Concerns: Caracas Mover

Feb. 21 (Bloomberg) — Venezuelan bonds rallied on speculation President Hugo Chavez’s health is worsening after a columnist for El Universal newspaper said that he may have traveled to Cuba for medical tests related to cancer.

The yield on Venezuela’s benchmark 9.25 percent bonds due 2027 fell 6 basis points, or 0.06 percentage point, to 11.82 percent at 10:43 a.m. in New York, according to data compiled by Bloomberg. The bond’s price rose 0.38 cent to 81.88 cents on the dollar.

Nelson Bocaranda, a columnist for Caracas-based El Universal, said yesterday that Chavez traveled to Cuba to meet with a team of doctors to decide whether to undergo a third operation after having a cancerous tumor removed in June. Venezuelan Information Minister Andres Izarra denied the report yesterday on his Twitter account.

“Rumors of Chavez being back in hospital for emergency surgery in Cuba began to circulate among traders over the long weekend,” Russell Dallen, head bond trader at Caracas Capital Markets in Miami, said in an e-mail. “The health rumor has put a bid under Venezuela bonds among those hoping for regime change.”