Attractiveness of Honduran Debt Falls

Analysts are warning that Honduran private banks are loosing interest in the debt certificates of the government, which has saturated the market with its bond issues.

Tuesday, October 16, 2012

In an article in Elheraldo.hn the president of the National Commission of Banks and Insurance (CNBS), José Luis Moncada, notes that "The bond saturation is of concerned to representatives of private banks, which already have enough bonds. They have expectations that on the expiration date of these securities, the State will continue with a renewal process and it will not have the liquidity to pay the principal and interest".

Moncada explains that "the pre-election environment is creating uncertainty and government is disbursing a significant amount of resources in order to finance the primaries."

Moreover, a recent report by the Ministry of Finance indicates a fall in tax revenue up to September of this year and therefore there will be problems honoring the payment of salaries of public servants.

Undersecretary of Finance, Carlos Borjas, said that they will end the year with a deficit of over $610 million. Moncada estimated that this amount may be greater on account of floating debt which has not yet been recognized.



More on this topic

State Bank Issues Bonds for $1 billion

October 2013

Costa Rica's National Bank has issued on the international market $500 million five-year and $500 million ten year bonds with interest rates of between 5.3% and 6.5%.

For now the National Bank of Costa Rica (Banco Nacional or BNCR) will not refer to the operation due to limitations of the U.S. regulation under which the issue will be performed.

Honduras to Sell $105 million in Bonds

June 2013

Sales of securities by the Honduran government in 2013 have been at interest rates of around 6%.

According to Evelyn Bautista, Vice Minister of Finance for Credit and Public Investment, of the total amount of $419 million authorized by Congress in the General Budget of Revenues and Expenditures, they have managed to issue in the domestic financial system 75% of that figure, and they plan to issue the remaining 25%, which amounts to $105 million.

Honduras: Issue of $1 Billion in Debt

December 2012

The Honduran government has been authorized to issue $250 million in the domestic market, and up to $750 million in sovereign bonds on the international market.

Latribuna.hn reports that "In the edition of La Gaceta on Tuesday 4th of this month, number 32.391, authorization has been granted to 'the Executive to through the Ministry of Finance', to issue bonds 'up to a amount of 750 million US dollars, to be placed on the international capital market. "The Treasury is also authorized to issue a 'domestic debt of securities additional to the amount authorized in the General Budget of Revenues and Expenditures Republic, for fiscal year 2012 in the an amount of 4,900,000 million ' lempiras. "

Attractive Opportunities in Bonds

September 2012

The current rates for investment in dollars available in Costa Rica represent attractive options- which are scarce right now, compared to the international markets.

From a report by Aldesa on its blog Pulso Bursátil:

Interest rates internationally in dollars are still at historic lows and the market consensus suggests that this Thursday, the U.S.

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