The issue that is planned to be made in July, will be used to settle accounts for $448.7 million which the government owes to builders.
"It's an important issue," said Alejandro Sinibaldi, head of the Ministry of Communications, Infrastructure and Housing (VIC), therefore, this month the initiative will be taken to Congress.
According to the Finance Minister Pavel Centeno, the project will be undertaken after rearranging the budget, as there are plans to make spending cuts of about $153.8 million amid falling revenues.
For the third consecutive week the Ministry of Finance in Guatemala has declared unsuccessful the placement of treasury bonds.
From a press release from the Ministry of Finance of Guatemala (Minfin):
The Ministry of Finance continued this June 3 with the placement of Treasury Bonds of the Republic of Guatemala, for the fiscal year 2013. These financial instruments were offered in the form of price in the local market, through public auctions and tenders in quetzals carrying the expiration date of December 2, 2013.
Between June and July, the government plans to place in the local market $250 million in Treasury bills in order to ease their financing needs, not addressed by Congress.
According to Pavel Centeno, Finance Minister the measure is in response to the Government not gaining Congress' approval for taking out loans.
"We hope that legislators understand the sensitivity of financing the general budget of the nation.
Next Tuesday, January 15, the first $100 million will be auctioned on the local market.
Starting January 15, the Ministry of Finance (Mifin) will issue approximately $1 billion in treasury bonds.
According to an article on Prensalibre.com, the Mifin is still discussing when and how it will issue the remaining loans.
Pavel Centeno, Minister of Finance, said that taking into account the need to lower the financial pressure "it will place all bonds approved in the budget on the market in the first three months." According to Centeno, the bonds approved in the 2013 budget total approximately $1 billion.
The proceeds of the issue will be used to settle obligations maintained by the Ministry of Communications, Infrastructure and Housing (CIV), with construction companies.
"What is still unclear is the technical procedure to register the issue in the Budget of Revenues and Expenditures of the Nation, as they are analyzing the possible impact on this year, and therefore the projected fiscal deficit for the current period", reported Siglo21.com.gt.
The bonds have a term of 10 years and an interest rate of 5.8% and there are still $60 million to be issued.
After an absence of eight years, Guatemala has returned to the international debt market, managing to place $700 million in 10 year bonds with an interest rate of 5.8%, said Finance Minister Pavel Centeno.
The Guatemalan Treasury bonds were placed through Deutsche Bank and stirred up demand for $2 billion by a select group of investors - from Europe, the USA and Latin America, so much so that the placement was expanded from the original $500 million expected, reported elPeriodico.com.gt.
The government has completed the fourth release for sale of bonds for the fiscal year 2012 worth Q286.7 million ($36.7 million).
A bulletin from the Ministry of Finance reports that the financial instruments are being offered in the local market through auctions and tenders in quetzals, reports Prensalibre.com.
According to the document, during the fourth release there was demand for Q323.8 million ($41.4 million), of which 62.5% came from the private sector and 37.5% from the public sector
This is the maximum amount allowed by law and the first issue will be on February 13th .
Guatemala's government plans to place up to Q 2,500 million ($ 320.1 million) in treasury bills in 2012, announced the Ministry of Public Finance (Minfin). The first release will take place on February 13th .
The amount is equivalent to 20 percent of current revenue estimates, which is allowed by Decree33-2011, contained in the State’s Budget of Income and Expenditures for this year, reported La Prensa Libre on its website.
Lack of flexibility in the loan approval in Congress is forcing the government to resort to other measures.
The Guatemalan government has announced that it will release short-term treasury bills, usually considered a financing tool for emergency liquidity due to their characteristics.
The decision to issue the bills, which are very short with terms of less than a fiscal year, is being based on the fact that loans available for use have not yet been approved by Congress.
The Ministry of Public Finance has placed more than $50 million in dollars and quetzals on the market.
The treasury bonds have been issued both in quetzales and dollars, each for various time periods.
A report by Byron Dardón to La Prensa Libre states: "Of the total registered bonds, 81.8% are from the private sector and 18.2% from the public sector .
The Ministry of Finance issued $ 10.5 million in dollar-denominated securities and $ 103 million in Quetzales (Q802 million).
Most of the placement was made at 12 and 15 years, $ 66 million and $ 16 million, respectively, paying interest of 8.8% and 9% respectively in Quetzales.
As reported by Prensalibre.com, 67% of the issuance was sold to the private sector.
In the auction held on Tuesday, the Finance Minister issued $28.38 million worth of bonds with terms of 11 and 15 years, paying interest of 8.6% and 9.0% respectively.
The event, which took place in the local exchange, saw the minister receive offers for a total of $39.64 million, with 96% coming from private investors and the rest from the public sector.
The finance ministry confirmed that it will sell $213 million in bonds to replace securities issued years ago and due on 2010.
Such bonds will be in addition to $560 million issued recently. The proceeds of the sale will be used to pay a series of “Peace Bonds” (Bonos Paz) due in 2010.
The ministry assured that “this has no effect on our debt ceiling or the fiscal deficit.
After the first auction, the finance ministry issued just $48 million in bonds, even though domestic investors demanded $308 million.
In a press release, the ministry explained that “interest rates offered by investors were not adequate”.
Authorities only placed 15-year securities, paying a 9% interest rate in local currency. 72% of the market’s demand was focused on 10 and 15-year securities.
On June 15 the Finance Ministry will start selling $560 million in Treasury Bonds in the domestic securities market.
They will use an auction-based method to sell the securities, and they are currently considering whether to offer the bonds in the international market.
“The issue will be split in 2-year, 5-year, 7-year, 10-year and 15-year securities, and the interest rates will be defined by the market.