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Venezuela crisis: Credit Suisse bars bond buys and new business

Venezuela crisis: Credit Suisse bars bond buys and new business

Credit Suisse has barred its traders from buying or selling certain Venezuelan bonds and is restricting business with Venezuelan private companies and individuals.

The political and economic crisis in the South American country has deepened after the July 30 vote to elect a legislative body to rewrite Venezuela’s constitution, a move seen as an attempt from president Nicolás Maduro to gain more power.

According to a memo seen by Bloomberg, the Zurich-based bank will no longer trade two government-issued bonds or any notes from a Venezuelan entity issued after June 1.

Credit Suisse bankers must also go through its Reputational Risk office to approve all businesses with any Venezuelan counterparts, reported Reuters, which also saw the memo. Business will have to have companies ‘controlled by the Venezuelan government, private sector and individuals’ approved, as well as any entity where there is an ‘active Venezuelan’ involved.

‘In light of the political climate and recent events in Venezuela ... we want to ensure that Credit Suisse does not provide the means for anyone to violate the human rights of the Venezuelan people,’ said the memo, according to multiple reports.

A Credit Suisse representative confirmed the contents of the memo to Citywire Americas but declined to give further comment.

It is understood the restrictions extend to private bankers within the business, and that any restrictions would not impact current Venezuelan clients or those that already hold Venezuelan securities.

Banned bonds

The bonds which Credit Suisse has prohibited transactions on include the Venezuela sovereign bond maturing in 2036 and the 6% bond issued by Petroleos de Venezuela, PDVSA, maturing in 2022.

Goldman Sachs bought almost $3 billion of the PDVSA 2022 bonds in May, sparking controversy as it was seen as giving a boost to Maduro’s controversial government.

Anti-government protests triggered by shortages of food and medicine over the last few months have been met with excessive force by Maduro’s administration. Since the election last month, the US has put sanctions against Muduro and 30 high-level supporters and administrators and is considering a ban on oil imports.

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