Ambitious Plan for External Debt

In Costa Rica, the Alvarado administration will ask the Congress for authorization to issue Eurobonds in international markets for at least $5 billion.

Wednesday, November 21, 2018

The Finance Minister, Rocío Aguilar, reported on November 20 that the country's public debt plans include the possibility of attracting more resources in the international market. One of the alternatives would be to place $5 billion in the next four years.

Aguilar explained that "... In the coming days, tomorrow or the day after, an authorization will be presented to the Congress to finance us in international markets. This becomes necessary because of the delay in the tax reform and constant indebtedness, expensive and short term accumulated. It is forcing us to release the pressure on the domestic market by competing resources."

The minister added that "... the authorization will be for a four-year period. In the first two years the authorization will be with a debt ceiling of up to $1.5 billion each. While in the other two years, an annual limit of up to $1 billion. The only point to be defined is whether the authorization is extended from four to six years."

Regarding recent debt issues, on November 19th the Ministry of Finance reported that it placed $200 million in firm domestic market and another $400 million in the best effort.

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More on this topic

Costa Rica: Government Urges to Issue More Eurobonds

September 2019

The Ministry of Finance plans to present a new bill in the Legislative Assembly to issue $4.5 billion in foreign debt bonds next year.

The amount that will be requested is what is needed to reach the $6 billion that was requested this year before Congress, of which only $1.5 billion was authorized.

Fiscal Uncertainty despite Eurobonds

July 2019

Although the Legislative Assembly approved the issuance of $1.5 billion of debt in the international market, Fitch Ratings believes that in the coming years there could be renewed uncertainty about the sources of financing for the Costa Rican government.

For the qualifier, the uncertainty could resurface because the Treasury Department's initial plan was to issue $6 billion within six years, however, the Legislative Assembly Committee in charge of the file modified the text so that the limit would be $1.5 billion.

Approval to Issue Eurobonds

July 2019

The Legislative Assembly of Costa Rica approved in second debate the bill that authorizes the government to issue up to $1.5 billion in bonds in the international market.

The Ministry of Finance (MH) reported that with the approval of Bill No. 21.201, which was made on July 16 as planned, the Executive is authorized to administer, issue and manage financing operations in the international market up to an amount of $1.5 billion (one thousand five hundred million U.S. dollars), during the following year after the law was approved.

Costa Rica to Issue $4 billion in Foreign Markets

June 2018

To avoid further pressure on local interest rates, the Ministry of Finance will be considering issuing $1 billion a year in the international market over the next four years.

Representatives from the Ministry of Finance confirmed that they are preparing an application to the Legislative Assembly to issue $4 billion in debt securities in the international market.

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