Attractive Opportunities in Bonds

The current rates for investment in dollars available in Costa Rica represent attractive options- which are scarce right now, compared to the international markets.

Tuesday, September 11, 2012

From a report by Aldesa on its blog Pulso Bursátil:

Interest rates internationally in dollars are still at historic lows and the market consensus suggests that this Thursday, the U.S. Federal Reserve will accompany the statements from its meeting of the Open Market Committee with an announcement of a new monetary stimulus.

Will interest rates in dollars remain low?

Although it is not certain, large banks such as JP Morgan, Goldman Sachs, Barclays and Deutsche Bank, are believed to be announcing a third round of asset purchases, which will be between $300 and $500 billion and will focus on, but not be limited to, the purchase of mortgage assets.

In addition to this new round of asset purchases, which means nothing more than billions of dollars being injected into the financial system, some analysts believe that the Fed will change the phrase in which it guarantees exceptionally low interest rates until the end of 2014, to "until the end of 2015”.

Interest rates internationally in dollars will support more downward pressure and that makes the current rates available for investments in that currency in our country attractive and scarce options, even after discounting the lower amount of liquidity compared to the international markets.

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More on this topic

Costa Rica: Growth in Demand for Eurobonds

July 2016

Low interest rates in the international market have favored Costa Rican sovereign debt bonds which are yielding better dividends.

Higher rates paid out by Costa Rican bonds with their associated risk level, coupled with an international context of low interest rates, has led to increased demand for foreign debt bonds, which "... have appreciated between 14% and 30%" so far this year.

Costa Rica Prepares New International Debt Issuance

March 2014

The government is working on a bond issue in the international market for $1 billion, with terms of between 10 and 30 years.

The bond issue was structured by the Bank of America, Merrill Lynch and Deutsche Bank according to information provided by Jordi Prat, Deputy Minister of Investment and Public Credit.

ICE Raises $11.6 million

February 2012

The Instituto Costarricense de Electricidad (ICE) has received $11.6 million from the stock market by issuing bonds denominated in that currency and which mature on February 13th , 2019.

According to a Blog by Aldesa, Pulso Bursatil:

The certificate has a coupon of 5.5% on a quarterly basis and was in demand by individual investors primarily because the average amount of the 105 offers was for $110,000.

El Salvador Issues $ 653 Million in Bonds

January 2011

The Salvadoran government placed $ 653 million in bonds in the international market on January 25 .

The acquisition was announced at 9:30 am local time (10:30 New York time) and three hours later, demand had reached $ 1,628.9 million, more than double the amount offered by El Salvador, reflecting the strong international interest in acquiring the Salvadorans bonds.

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