With this issue, the first since April 2006, the government intends to finance the Global Anti Crisis Plan and finance the State's budget.
Carlos Acevedo, president of the Central Bank, gave details about the issue to newspaper La Prensa Gráfica: "... the 7-year securities will pay an interest rate between 7% and 8%. The country's outstanding Eurobond debt is $3,24 billion. From these, $654 million correspond to 2011 Eurobonds, which expire two years from now".
The objective would be to swap short term Treasury notes, which will expire soon.
In May Congress approved a $1.800 million debt plan, which includes $800 million for facing the due date of short term debts, as well as $650 million for the expiration of foreign debt.
The Salvadoran Foundation for Social and Economic Development(FUSADES), recommended the issuance of $800 million worth of Euro-bonds to cover the expiration of the Treasury Notes. This way, a short term debt would be restructured into a long term one.
The agency improved the rating from B to B + highlighting the process of fiscal consolidation in place since 2014 but warned of weak internal controls and limited transparency in the public sector.
From a statement issued by Standard & Poor's:
We expect that continued implementation of recent fiscal and energy-sector reforms will contain Honduras' general government fiscal deficit to around 4% of GDP over the next two years, helping to keep net general government debt below 40% of GDP over the same period.
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