Credit Suisse bans trading in certain Venezuela securities

zurich — Credit Suisse Group has banned its traders from buying or selling certain Venezuelan securities that critics of the nation’s government say help fund an authoritarian regime.

The Zurich-based bank is halting trading in two bonds issued by the state and its oil company, as well as any notes from a Venezuelan entity after June 1, according to an August 7 company memo, a copy of which was seen by Bloomberg. The lender is also restricting business with Venezuelan counterparties, including private individuals and companies. A Credit Suisse representative confirmed the memo’s contents.

The decision comes after the US began imposing sanctions on some Venezuelan officials in response to the anti-democratic turn of President Nicolas Maduro, who installed a widely criticised assembly to rewrite the country’s constitution. It also marks a victory for Venezuela’s opposition leaders, who had been urging Wall Street banks not to throw Maduro a financial lifeline, and spearheaded a public shaming of Goldman Sachs Asset Management after it purchased some of the securities now prohibited by Credit Suisse.

“In light of the political climate and recent events in Venezuela, and actions taken by the current government, we want to ensure that Credit Suisse does not provide the means for anyone to violate the human rights of the Venezuelan people,” according to the memo.

The prohibited securities are government debt due in 2036, as well as 6 per cent coupon bonds issued by Petroleos de Venezuela due in 2022.

Faced with reduced oil prices, the country — which depends on crude sales for 95 per cent of its export revenue — has been plagued with shortages of everything from toilet paper to antibiotics and food. With the Maduro government quickly running out of money to pay for imports and interest payments on foreign debt, it has turned, in part, to asset sales to raise whatever cash it can. — Bloomberg