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.
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.
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).
The Ministry of Finance plans to present a new bill in the Legislative Assembly to issue $4.5 billion in foreign debt bonds next year.
The amount that will be requested is what is needed to reach the $6 billion that was requested this year before Congress, of which only $1.5 billion was authorized.
In the exchange of foreign currency debt that took place on February 6, the Ministry of Finance managed to negotiate $165 million of $428 million offered.
Grupo Prival reported that the debt that was swapped expired in 2019, 2020 and 2021, and now the bonds will expire in 2023 and 2026, which will give more looseness to the authorities to manage the country's public finances.
Because of fiscal uncertainty, in the first months of 2018, banks operating in the country reduced by 16% the amount invested in public debt securities in the local market.
Against the backdrop of doubts about the future of public finances in Costa Rica, it was reported that from January to September, 14 local public and private banks invested $3.190 million in government bonds.
The Ministry of Finance in Costa Rica has announced that between today and August 3 it will try to raise, through means of a direct issue in the local stock market, about $879 million.
Authorities reported that two issues of securities will be offered for sale on the Siopel platform of the National Stock Exchange.The first, of $284 million, will have a gross rate of 9% with maturity in 2020, and the second of $595 million, with a gross rate of 10.79% with maturity in 2028.
On January 14, the Ministry of Finance will turn to the local market to place an issue in colones which matures in September 2033 and has a fixed rate of 8.51%.
The Ministry of Finance intends to sell a surprisingly high amount using the electronic platform on Thursday 14 January. The issue is called Title Deed Issue Fixed Rate in Colones G210933.
Information sent by the Ministry of Finance states that they will use the rule of "first come, first served" on all applications received during the reception period for the issue. The maximum amount which can be allocated per investor applying the above rule will be 1% (it can not exceed 1%). Offers at or below the maximum percentage which can be allocated per investor will be allocated immediately.
The deterioration of public finances has forced the offering of a yield of 7.15% at 30 years, 4.44% above the US Treasury bond rate for the same time time period, with offers received for $3.5 billion.
From a statement issued by the Ministry of Finance of Costa Rica:
The Government of the Republic has issued securities in the international financial market worth $1 billion with a 30-year term and a rate of 7,158% a year.
The Ministry of Finance has started a process to contract an international bank to structure and place an issue of debt for an amount between $500 and $1 billion.
The Ministry of Finance started the process to place a new issue of sovereign debt this year, for an amount which, although not yet confirmed, will range between $500 and $1 billion. The process begins with the "...
Institutional investors can participate directly in bond auctions for the debt offered by the Ministry of Finance and the Central Bank without using a broker as an intermediary.
Any supervised financial institution such as banks, insurance companies, pension operators and investment fund managers can access the primary market to acquire debt securities issued by the Treasury or the Central Bank without going through a broker, who are so far the only entities authorized to carry out transactions on behalf of others in that market.
The Finance Ministry has proposed extending the maturity of domestic debt bonds, which would not be in the interest of investors.
"During 2013, the auctions were dominated by long-term securities, specifically, those whose maturity dates were equal to or exceeded ten years," noted an article in Elfinancierocr.com. However, the secondary market prefers bonds maturing in less than ten years, for example on 15 July, the placement of 30 year bonds was relatively small, barely reaching $10 million.
The interest rates on these bonds will be 4.5% for 12 years and 5.75% for 30 years.
The new issue of external debt bonds to be released by the Ministry of Finance this year will mature in 2025 and 2043.
As required by law, the maximum amount of the issue will be $1 billion. In this case the Ministry of Finance and structuring banks (Deutsche Bank and Barclays) set the amount at $500 million for 12 years and $500 million for 30 years.
Investment in short-term debt in colones has better performance than the long term.
For investment instruments in colones, such as government bonds, the short and medium term show better yields, while long have tended to decline.
"In dollars, the behavior is different. Experts consulted by El
Financiero reported that the momentum is pointing to a decline in interest in the coming months, therefore in this currency it may be wise to bet on a longer period and thus take advantage of higher levels of interest.
In the first three months of 2012 the Government of Costa Rica sold bonds on the Stock Exchange for 420,000 million colones ($828.56 million) and $254 million.
By comparison, in the first three months of 2011, the Ministry of Finance had raised 438,000 million colones ($864.6 million) and $124 million, according to data from the Stock Exchange.
"The national treasurer, Jose Adrian Vargas explained that the increase in bond sales in dollars is because they had to collect foreign currency to pay the $250 million Eurobond, which matured on 1st February," reports Nacion.com.