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).
In this regional context of economic crisis, falling fiscal revenues and increasing public debt, Costa Rica's debt level is expected to rise to 75% of GDP by 2021, and in the case of El Salvador, the indicator could exceed 85%.
The outbreak of covid-19 in Central America forced the government to declare severe household quarantines and to restrict several economic activities, restrictions that in some cases are still in place after five months of health and economic crisis.
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.
In order to face the health crisis, the Assembly authorized the issuance of securities for up to $2 billion, which will be issued in the national or international market.
According to the motion, 70% of the funds obtained will be used, as a priority, to attend to the health emergency and may be allocated to the fund for direct monetary transfers to economically vulnerable households, to cover the income shortfalls in the current budget, generated by covid-19 and to incorporate the resources into the General State Budget 2020, informed the Legislative Assembly.
The rating agency kept the country's debt rating at B3, but decided to change the outlook from stable to positive, arguing that the government's liquidity risks have been substantially reduced.
The affirmation of El Salvador's B3 sovereign ratings reflects high public debt ratios and a growing interest burden, the rating agency said.
Standard & Poor's has given a B+ rating to the $1.5 billion debt issue that Costa Rica expects to place in the international market in November.
"Global Ratings today assigned a "B+" rating to the prospective reopening of Costa Rica's notes which have a 7.158% rate maturing in 2045 and a "B+" rating in its planned issuance of notes maturing in 2031, the latter issue still does not have a defined trading rate," the rating agency said on November 8.
Although the goal for this year was to issue $100 million in debt bonds, during the first quarter the Nicaraguan government only awarded $1.1 million, doubting the level of investor confidence.
According to the "Public Debt Report, First Quarter 2019", prepared by the Central Bank of Nicaragua, from January to March regarding Investment Securities in dollars, 1.03 million was issued at an average rate of 5.31% and an average term of 7 months.
After the country issued $1.097 million in Eurobonds for a 30-year term, Moody's gave them a "B3" rating, while Fitch Ratings assigned them a "B".
Fitch Ratings has assigned a 'B-' rating to El Salvador's $1.097 million notes due January 2050. The notes have a coupon of 7.1246%, the agency said.
The Fitch statement dated July 31 adds that "... The proceeds from the issue will be used in accordance with local laws for general budgetary purposes, including the redemption of bonds maturing this year. The rating of the bonds is aligned with El Salvador's long-term foreign currency issuer default rating (IDR) of 'B-' with a stable outlook."
The issue was announced at an initial rate of 7.5% and a 30-year term, and $1.097 million was issued, with total demand five times greater than the amount of the issue.
The issue was for a 30-year term, maturing in 2050 and with a 7.1246% coupon, informed the Central Reserve Bank (BCR).
Authorities from both countries agreed to work on the unification of their stock markets, starting with the issuance of a quota of Guatemalan subsidized debt directed to Salvadoran investors.
Representatives of the Guatemalan Ministry of Finance and the Ministry of Finance of El Salvador informed that before the end of this fiscal year, the Guatemalan subsidized debt will be approximately $13 million.
The latest risk ratings for the issuance of long-term debt of Central American economies identify Panama as the most attractive country to invest in.
On March 8, Moody's decided to raise its long-term issuer rating in foreign currency from Baa2 to Baa1, arguing that the outlook remains more favorable in the medium term.
On November 14th, Banpro Grupo Promerica issued $200 million in bonds on the international market for a six-year term under the 144A format.
The bank announced that the issuance was made by Promerica Financial Corporation (PFC), its main shareholder, and that the issue was structured by Bank of America Merrill Lynch and Credit Suisse.
Ramiro Ortiz Mayorga, chairman of the board and CEO of Promerica, explained to Elnuevodiario.com.ni that "...
The Sanchez-Ceren administration plans to issue $800 million in debt securities to repay obligations that will expire next year and another $1.407 million to complement the 2019 national budget.
The Ministry of Finance presented to the Congress next year's Budget project, which includes, among other aspects, adjustments to the fiscal deficit that the government will register next year.
Inversiones Simco has placed the first $12 million of $20 million it expects to issue in the Salvadoran securities market, to finance part of the Millennium Plaza mixed-use project.
The securitization fund called Millennium was structured by Ricorp Titularizadora and amounts to $20 million.However, initially $12 million has been placed and the remaining funds will be raised as the works progress.
El Salvador's Congress approved an IDB loan of $350 million to finance the government budget deficit at a 3.25% rate.
The president of the Legislative Assembly, Norman Quijano, stated that " ..." with the conditions offered by the IDB we will have an interest rate estimated at 3.25%, with the bonds we had an average rate of 7 and 8%, the reduction of interests will mean a saving of tens of millions of dollars for the country.' "