Of the $100 million in debt that the government intended to place on the local market, offers were received for only $1 million.
The government was not able to place all of the debt securities it intended to, only managing to capture the interest of one bank, which bought $1 million in debt at a one year term and with an interest rate of 6.5%.
The Ministry of Finance will be attempting to raise funds in the international and local market in order to improve the public debt profile.
The endorsement by the Congress will allow the Ministry of Finance to extend the term and reduce the cost of part of the public debt.The amount authorized amounts to $891 million and the Ministry of Finance plans to use the local and international markets to renegotiate.
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.
Treasury debt securities were issued in Quetzales for an eight year term and with a rate of 6.35%.
From a statement issued by the Ministry of Finance:
The results of the placement of Treasury Bonds on November 22, 2016, are as follows: demand was received for Q.825.1 million, of which 100.0% corresponded to the maturity date of18/11/2024. This time Q.250.0 million was issued, ie 30.3% of demand, at a cut off price of 102.4757 and cut off rate of 6.3500%.The total issued to date amounts to Q14,493.46 million, leaving Q467.39 millionavailable for issue for the fiscal year 2016.
With the backing of Congress the National Electricity Company aims to raise money on the international market in order to improve its debt profile.
Converting short-term debt which has high rates to debt with longer maturities and with lower interest rates, is what the National Electricity Company (ENEE) is aiming for in the external market.Congressional authorization allows the ENEE to issue up to $858 million in debt.
Issuances registered between January and September 2016 exceed 60% of the total issuances registered throughout 2015, and projections are that the year will close with $7 billion traded in the local market.
The scandal generated from the leaked information about the firm Mossack Fonseca, "Panama Papers", and the questions about the lack of financial transparency that arose afterwards, do not seem to have affected the attractiveness of the stock market for providing finance to companies through the issuance of securities.
The government and the opposition have finally reached an agreement and approved the Fiscal Responsibility Law along with the issuance of $550 million in debt securities.
The issuance authorized by the Assembly may be made on the international or local market, and funds will be used to pay principal and interest on short-term debt, budget support and strengthening of the Fiscal Fund at the General Treasury of the Republic.
The government and the opposition have agreed to approve in the first instance an issue of $550 million, not $1.2 billion as claimed by the administration of Sanchez Ceren.
Although the government insists that there is a need is to issue $1.2 billion to cover short - term debts and solve the liquidity problem it is facing, this first agreement to issue $550 million will serve to"... pay for the electricity subsidy for FODES and the mayoral districts."
This will be the third issue of debt bonds to finance the airport's expansion project.The first was in 2013, in the amount of $58 million, and the second, for $19 million, took place in October 2015.Laprensagrafica.com reports that "...To date CEPA has only reported that using some of these resources, four new waiting rooms, which are expected to be built in the terminal, will be paid for."
A state of emergency has been declared and pressure has been put on the Assembly to approve borrowing in the order of $1.2 billion to honor short-term debts.
President Sanchez Ceren announced as a first step a declaratory emergency, so that before the close of 2016 they can 'attend to, discuss and build the best agreements that will provide the relevant results' on issues such as approval of bonds for $1.2 billion.With that amount the government hopes to deal with the illiquidity and respond to the state's short - term commitments.
In the next two years the banking group will issue $20 million on the Nicaraguan Stock Exchange in terms of less than one year and $40 million in terms of three to five years.
The issuance registered on the Nicaraguan stock market will be issued with terms of 24 months, in commercial paper and standardized bonds.The program consists of two series: Series A , with a term of up to 360 days (revolving) and Serie B, with terms of three to five years.
In Panama investors to whom the company owes $4.8 million in debt bonds will have to wait for the bank to be sold before recouping their investment.
Balboa Bank and Balboa Securities, which are under intervention of the Superintendency of Securities Market since they were included in the Clinton list, do not have sufficient funds to honor the $4.8 million owed in respect of securities.
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