The balance of debt authorized to finance the 2015 budget was issued in three tracts with maturities of ten, twelve and fifteen years, with rates of 6.99%, 7.19% and 7.38% respectively.
After declaring the auction held last week void, the Ministry of Finance has finally managed to place the balance of the debt issuance authorized by the Congress. Due to the conditions demanded by investors, the government had to adjust rates to levels below those offered in the auction of the first part of the issue.
On December 12th the Ministry of Finance expects to place in the domestic market the remaining 30% of the issue approved in order to finance the 2015 budget.
70% of the treasury bonds that Congress passed have already been awarded, and on December 12th it is expect that the remaining 30%, ie $110 million will be auctioned in the local market.
Carlos Gonzalez, an analyst at the Association for Research and Social Studies, told Diario de Centro America "... The extraordinary bond issue was made due to underfunding of the budget, resulting from low tax revenues. Also, the spending requirements of the Ministries of Health, Education and Government forced Congress to authorize this transaction. "
In terms of 10, 12 and 15 years and rates of 7.12%, 7.37% and 7.57% respectively, the government has issued treasury bonds for Q1,958.1 million, equivalent to $256 million.
Of the $366 million in treasury bonds approved by the Congress, 70%, which corresponds to $256 million, was placed by the Ministry of Finance in order to finance the budget for 2015, because the World Bank did not approved the loan of $340 million which was to be used for that purpose.
The Monetary Board approved the issuance of $ 673 million in securities to finance the 2011 budget.
The approval was unanimous, this time with the support of the private bank sector.
"Tulio García, representative of the private sector at the WB, said that opposing the decision of the board was a lost cause, so they opted to seek the Government's commitment for the fiscal 2011 deficit not to exceed 2.7 percent of gross domestic product (GDP) and wait for the year to end between 3.1 to 3.4 percent of GDP," writes Lorena Alvarez from Elperiodico.com.gt.
The Finance Commission of the Legislative approved to issue the bonds and increased them to $874 million.
Originally, the Executive had proposed to issue debt for 4500 million quintals ($562 million), but this figure was increased by the Finance Commission.
The project was conceived to fund the State’s budget, and will now be discussed by Congress.