El Salvador Issues $1 Billion in Debt

On July 8, the Salvadoran government issued $1 billion in bonds on the international market at a 9.5% interest rate with a maturity date of 2052.

Thursday, July 9, 2020

The resources collected through this international issue are part of the $3 billion debt issuance authorized by the government and will be used to finance the health and economic crisis resulting from the spread of the Covid-19.

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Elmundo.sv reviews that "... During the issuance process, the Salvadoran Association of Stock Market Intermediaries (ASIB) reported that the country was facing a market willing to receive debt for an interest rate between 9% and 9.5%."

The article adds that "... At the close of the collation, El Salvador achieved an issue of $1 billion at a coupon of 9.50%, from an offer close to $1.6 billion. This issue was structured for a 32-year period, that is, to be paid in 2052 but has a first coupon for January 15, 2021."

According to official data from the Ministry of Finance, the 9.5% rate is the highest El Salvador has obtained since it issued sovereign debt in the international market.

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More on this topic

Guatemala Issued $1.2 Billion in Eurobonds

April 2020

The country issued $500 million in the international market with a 12-year term, at a rate of 5.37%, and $700 million in the 30-year term, at an interest rate of 6.13%.

The operation was carried out through the Bank of America (BOFA), one of the most important investment banks in the world, chosen through a competitive process, informed the Public Finance Ministry (Minfin).

El Salvador's Eurobonds Issue Qualified

August 2019

After the country issued $1.097 million in Eurobonds for a 30-year term, Moody's gave them a "B3" rating, while Fitch Ratings assigned them a "B".

Fitch Ratings has assigned a 'B-' rating to El Salvador's $1.097 million notes due January 2050. The notes have a coupon of 7.1246%, the agency said.

Successful Eurobond Issuance from El Salvador

July 2019

The issue was announced at an initial rate of 7.5% and a 30-year term, and $1.097 million was issued, with total demand five times greater than the amount of the issue.

The issue was for a 30-year term, maturing in 2050 and with a 7.1246% coupon, informed the Central Reserve Bank (BCR).

Costa Rica is Closer to Issuing Eurobonds

July 2019

The Legislative Assembly approved in first debate the issuance of $1.5 billion in debt securities in the international market, which in the opinion of the rating agencies, helps to reduce uncertainty about the government's ability to meet its financing needs.

The Treasury Department's initial plan was to issue $6 billion within six years, however, the committee in charge of the file modified the text so that the limit would be $1.5 billion.

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