The Central American country placed in the international market $1.25 billion at a rate of 2.2% expiring in 2032 and $1.2 billion at a rate of 3.4% expiring in 2060.
Panama ventured today into the international capital markets through the reopening of Global Bonds expiring in 2032 and 2060 for an amount of $2.45 billion, as part of the financing plan for fiscal year 2021, informed the Ministry of Economy and Finance (MEF).
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.
The bill that in Costa Rica authorizes the Alvarado administration to issue $1.5 billion in debt in the international market has already taken the first step in the Legislative Assembly.
At the beginning, the Treasury Department requested authorization 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.
So far in the Morales administration, the Guatemalan government has raised $2.4 billion through the issuance of Eurobonds, but the quality with which the funds collected are being executed is questioned.
The last issuance of Eurobonds was on May 23, when the government issued $700 million over 30 years at a 6.12% rate, and $500 million over 10 years at a 4.9% rate.
In Costa Rica, the Alvarado administration will ask the Congress for authorization to issue Eurobonds in international markets for at least $5 billion.
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.
Low interest rates in the international market have favored Costa Rican sovereign debt bonds which are yielding better dividends.
Higher rates paid out by Costa Rican bonds with their associated risk level, coupled with an international context of low interest rates, has led to increased demand for foreign debt bonds, which "... have appreciated between 14% and 30%" so far this year.
The government sold government 10 year term bonds for $1.25 billion on the international market at 4%, the lowest interest rate in the list of international issues placed by the country.
From a statement issued by the Ministry of Finance and Economy of Panama:
Panama launched (on September 15, 2014), in the international market, a successful issuance of global bonds for $1,250 million, which exceeded expectations, having demand of more than six times the initial offer, and obtaining the lowest coupon in the country's history.
The government has placed on the international market an issue due 2027 at a coupon of 6.375%, with offers that exceeded the amount placed by 5.8 times.
From a statement issued by from Presidency of El Salvador:
(Thursday 11 September) the Republic of El Salvador made a successful placement of sovereign bonds (Eurobonds) in the international market to the tune of $800 million, covered by Legislative Decree No.
The risk premium demanded by investors for the Costa Rican international bond due in 2023 rose from 2.10% to 2.56% between June and September 2014.
Investors could be moving towards a degradation of the sovereign rating of the country, a possibility already suggested by Fitch rating agency.
An article on Nacion.com reports that "... Since last June, the extra rate of return that foreign savers demand for Costa Rican Government's securities in respect to United States Treasuries (so-called risk premium or margin) has gone. "
Fitch has also downgraded the issue ratings on Guatemala's senior unsecured foreign and local currency bonds to 'BB' from 'BB+', with outlook revised to Stable.
From the press release by Fitch Ratings:
Fitch Ratings has downgraded Guatemala's long-term foreign and local currency Issuer Default Ratings (IDRs) to 'BB' from 'BB+'. Fitch has also downgraded the issue ratings on Guatemala's senior unsecured foreign and local currency bonds to 'BB' from 'BB+'. The Rating Outlooks on the long-term IDRs have been revised to Stable from Negative. In addition, Fitch has downgraded Guatemala's Country Ceiling to 'BB+' from 'BBB-' and affirmed the short-term foreign currency IDR at 'B'.
The Honduran government could be looking to raise another $1 billion on the international market in 2015.
Added to the $1 billion placed in the external market in 2013 there could be a further issue of the same amount, according to the Ministry of Finance, which is analyzing how they might be structure the placement and the financial costs to be assumed.
The government is working on a bond issue in the international market for $1 billion, with terms of between 10 and 30 years.
The bond issue was structured by the Bank of America, Merrill Lynch and Deutsche Bank according to information provided by Jordi Prat, Deputy Minister of Investment and Public Credit.
"The government is considering a new bond issue for 10 years or 30 years, or a combination of both."
Moody's has downgraded the government's debt bonds from B3 to B2 and modified the outlook to stable.
The growth of the fiscal deficit in 2013 of 5.9 % to 7.7 % of GDP and the rise in the issuance of debt securities in the domestic market led to the ratings agency Moody's to cut the credit rating for sovereign bonds traded on the international market.
The Superintendency of Securities has permitted secondary market trading of the bonds issued by the Republic of Costa Rica which mature in 2025 and 2043.
According to the Superintendency of Securities (Sugeval) for these securities the minimum face value must be $200,000 and the minimum increments after negotiation is $1.000, as in international markets.
The bond issue is announced for mid-year, as part of the financing for the construction of the South Terminal.
Juan Carlos Pino, manager of the company, estimates that the bonds will be issued at the end of June or early July.
The funds will be used to expand the capacity of the existing terminal. "We need to build new taxiways to speed the transit of aircraft in the terminal in the rush hours," said Pino.