Costa Rican Debt Keeps Falling

An increase in the yields of U.S. Treasury bonds has increased the sale of bonds in dollars, impacting on Costa Rican bonds traded internationally and in the domestic market.

Wednesday, June 12, 2013

From a report on 'Pulso Bursátil', the blog by Aldesa:

Fall in Costa Rican Bond Prices Sharpens

As mentioned recently, the rise in yields of U.S. Treasury bond has triggered a sell-off of dollar-denominated bonds, which firstly hit hard Costa Rican internationally traded bonds, but recently has also started to affect Bond prices traded in the domestic market.

From its lowest point in May, Treasury bonds rose from 2.80% to 3.43% today, and the 10-year bond, from 1.62% to 2.29%. These increases have made the rest of the bonds see their prices fall in order to adjust yields upwards and keep premiums relatively stable.

¿Busca soluciones de inteligencia comercial para su empresa?



More on this topic

Costa Rica: Prices Drop for Foreign Debt Bonds

November 2016

The "Trump effect", added to the upward pressure caused by inflation in US interest rates, explains the upward trend in the performance of Costa Rican bonds and the fall in their price.

A resumption of the upward trend seen in debt securities traded on the international market could make it difficult for the government access external financing, in a context in which most bonds from emerging market countries are experiencing the same situation. If the government decides to resort to financing in the international market, the cost of doing so would be higher if bond yields continue to rise.

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.

Central America and the Rise in Dollar Rates

December 2015

For the first time in nine years, the Federal Reserve has raised the benchmark interest rate, by 0.25%, starting off a process of a gradual adjustment which will make credit more expensive.

After seven years of interest rates at historical lows, signs of recovery in the US economy have led the Federal Reserve to announce the first upward adjustment in the federal funds rate, the main reference rate for structuring interest rates in the United States and around the world.

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.

ok