CABEI signed a memorandum of understanding with other Central American organizations to strengthen the development of the regional public debt market.
The agreement was signed by the Central American Bank for Economic Integration (CABEI), the Executive Secretariat of the Council of Finance Ministers of Central America, Panama and the Dominican Republic (SECOSEFIN), the Executive Secretariat of the Central American Monetary Council (SECMA) and the Association of Central American Stock Exchanges (BOLCEN).
The rating agency decided to maintain at "B" the long-term and short-term local and foreign currency sovereign credit rating, with a negative outlook indicating the risk of a downgrade in case the Assembly does not approve an Extended Fund Facility or other policy measures.
In the current scenario, covering the government's large financing needs may require resorting to the central bank or other non-conventional financing, highlights the rating agency's analysis.
In addition to the $1,750 million that the government is seeking to obtain through the loan it is negotiating with the IMF, during the four years between 2022 and 2025 the country plans to place $4,000 million in foreign debt bonds.
During the auction held on February 1, 2021, the placement of domestic debt securities in local currency amounted to the equivalent of $210 million and in dollars to $115 million.
Through this mechanism, ¢129,667 million ($210.5 million) in Domestic Debt Securities Fixed Rate Colones and Sovereign Adjustable Real Domestic Debt Securities were allocated, informed the Ministry of Finance.
Given the agreement reached by the Alvarado administration and the IMF for Costa Rica to access a $1.75 billion loan, the business sector is calling for a reduction in public spending and for detailed information on the scope of the agreement signed by both parties.
In an attempt to ease the fiscal and economic crisis the country is going through, last year the Alvarado administration began negotiations to access a loan for $1.75 billion to be requested from the International Monetary Fund (IMF).
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).
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.
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.
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).
The Ministry of Finance issued Treasury Bonds for an amount equivalent to $116 million, of which $52 million was in local currency and $64 million in foreign currency.
The overall amount of Treasury Bonds issued by the Republic of Guatemala so far, amounts to $414 million, corresponding to Fiscal Year 2020, of which one million correspond to Treasury Bonds issuances for small investors.
Treasury authorities announced that plans for this year are to negotiate with the Legislative Assembly for approval to issue debt in the international market, and if approved, the issuance would take place in 2021.
Last year the executive branch's plans were to issue $6 billion in Eurobonds, but the Legislative Assembly approved the issuance of only $1.5 billion, arguing that the amount proposed at the beginning was too high.
As of December 2019, the external debt of the private sector amounted to Ch$1,817 million, 11% higher than that reported at the end of 2018.
From the Central Bank of Honduras report:
The balance of private external debt at the end of 2019 was US$1,816.6 million, increasing US$175.6 million compared to the one reported at the end of 2018; result of a net use of US$191.4 million and a favorable exchange variation that reduced the balance by US$15.8 million.
For this year, the government of Guatemala plans to issue an amount equivalent to $2.392 million, which includes new issues and titles that will expire soon and will be awarded again.
According to information from the Directorate of Public Credit, an entity of the Ministry of Finance (Minfin), during 2020 new issues will reach $ 1.845 million and collections or roll over, titles that expire but will be re-issued in the market, will be of $547 million.
To ensure financing for its future functions, the Costa Rican government will seek loans from the World Bank, IDB, CABEI and CAF during 2020, and plans to insist on the approval of $4.5 billion in Eurobonds.
For this year, the Costa Rican government plans to continue negotiating loans for budget support with the World Bank, the Inter-American Development Bank (IDB), the Central American Bank for Economic Integration (CABEI) and the Andean Development Corporation - Latin American Development Bank (CAF).
On November 12, the debt securities were sold in the international market, and at the end of the negotiation, bonds were issued for $1.2 billion maturing in 2031 and $300 million maturing in 2045.
The negotiation of the public debt issued by the government of Costa Rica in the international market closed at noon on November 12, and the yield for those maturing in 2031 was 6.25% and for those expiring in 2045 was 7.25%.