Debt Issuance: Plans in Costa Rica

The Central Bank announced that for the first half of 2020 it expects to issue $438 million in the primary market, as Stabilization Bonds.

Friday, February 28, 2020

From the BCCR statement:

San José, February 27, 2020. Consistent with monetary policy goals, the Central Bank of Costa Rica expects to carry out an issuance of Monetary Stabilization Bonds (BEM), in the primary market, for ₡250.000 million.

This amount is like the volume of maturities that will be faced during the first semester of this year. Thus, the Central Bank expects that, at the end of June 2020, the balance of bonds will be around the same level observed at the end of the previous year.

According to the issuance strategy carried out in the last years, the BCCR will issue bonds through competitive auctions. Specifically, it will hold monthly auctions, with instruments with terms of close to six months (zero coupon) and two years (fixed rate bonds). So far, the BEM issuance reaches ₡113.017 million in traded value, which corresponds to 45% of the amount to be raised for the semester.

It is expected that the allocation rates will be consistent with the policy decisions adopted by the Board of Directors, thus reinforcing the transmission of the monetary policy.

In the activity, the National Treasury presented the results of debt issuance for the second semester of the previous year, during which securities were issued for ¢1.3 billion, amount equivalent to 93% of the requirement in the internal market. At the same time, there was a greater lengthening of the issuance period, a reduction in direct sales balances by 34% and a decrease in the maturities of liability management operations for the next few years.

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