Public Investment Securitization in Costa Rica

Institutional investors will have the opportunity to diversify portfolios so far composed of government paper.

Monday, October 18, 2010

Investing in public securities will give pension funds operators better returns for their clients, since these projects typically offer additional profits.

Regulations on public investment securities, for projects over $ 3,600 million, expect to assist in funding such projects.

The article by Juan Pablo Arias, from Nació, says: "As for public investments, these emissions which are considered long term, would be designed for five or more years. The increment in supply of these instruments will be held by institutional investors as well as pension operators, which need investment in vehicles with this maturity range."

More on this topic

Costa Rica Seeks to Activate Stock Market

November 2010

A group of executives of financial institutions are working with the Central Bank in search of solutions to the stock market stagnant growth.

As outlined in the article in, "The team is made up of José Rafael Brenes, director of the BNV, Roberto Venegas, financial advisor and ex manager of the Stock Exchange, Lanzo Luconi, president of the National Investment Fund Company , Jose Adrian Vargas, National Treasurer, Thomas Allen, chief financial officer of Florida Ice & Farm, Lucia Fernandez, manager of IBP Pensions and Frederick Ruzicka, Mutual Valores stockbroker."

Costa Rica: Public Works Securitization Faces Criticism

June 2010

The mechanism to finance public infrastructure through trusts and securitization has been the target of strong criticism. reported that “critics argue that there would be very little regulation and almost none supervision of the proposed financial instruments”.

Costa Rica Approves Mechanism for Funding Public Infrastructure

April 2010

Costa Rica approved a system to finance the construction of public works via trusts and securitization.

Approved by supervisor Conassif, the mechanism comprises the creation of “Issuing Trusts”, which will issue securities in the local market. Said securities must be priced $50.000 or more, and may only be bought by sophisticated investors.

Public Works Securitization

March 2010

Costa Rica still faces obstacles to implement this mechanism, regarded as the best alternative for funding public works.

Public works securitization is once again being discussed, as the upcoming Tourism Minister stated it will be used to fund a new National Conventions Center.

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