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.
Arguing that economic strength has weakened as a result of social tensions and is likely to leave a lasting negative impact, the rating agency reduced the country's credit risk rating from B2 to B3.
"The risk of reduced access to official external credit is creating financing challenges and restricting the authorities' ability to support economic activity," the agency's report explains.
The Ministry of Finance issued Treasury Bonds for an amount equivalent to $215 million, of which $155 million was in local currency and $60 million in foreign currency.
The amount awarded represents 8.42% of the total value for which the Global Representative Certificate for Fiscal Year 2020 was issued, including issuances for Small Investors, officials said.
Arguing that the high fiscal deficit is still on an upward trend, the rating agency downgraded the long-term and senior unsecured government bond issuer's note from B1 to B2.
Fiscal deficits averaging more than 6% of GDP since 2015 have led to higher public debt/GDP than its 'B'-rated peers, the rating agency said.
From Moody's statement:
New York, February 10, 2020. Moody's Investors Service, ("Moody's") has today downgraded the Government of Costa Rica's long-term issuer and senior unsecured bond ratings to B2 from B1 and changed its rating outlook to stable from negative.
The rating agency maintained BBB's long-term issuer default rating, but decided to change the risk outlook from stable to negative, arguing that the debt burden will continue to increase in 2020.
KEY RATING DRIVERS
The revision of Panama's Outlook to Negative reflects a marked deterioration in fiscal deficits and a significant increase of the government's debt burden, related to accumulation of arrears by previous administration and higher fiscal deficit targets under the modified Fiscal Responsibility Law. In addition, the recent greater-than-anticipated growth deceleration creates additional challenges for fiscal consolidation.
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).
In Honduras, Congress approved the creation of the Social Interest Housing Bond, which will be a state contribution in cash or in kind, and may not be less than 11% of the value of the home to be purchased or rented.
According to Article 18 of the law, to access these bonds, the Secretariat of Housing and Human Settlements (SEVIAH) will prioritize access to the bond and housing care for households with incomes less than or equal to four (4) Minimum Wages, at its highest scale in force, Congress reported.
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%.
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.
Fitch Ratings kept in B+ with a negative outlook, the sovereign debt rating, arguing that "the weaknesses in public finances are reflected and the political stagnation has prevented the timely approval of reforms that address these problems."
The new fiscal rule has not been approved, and the Congressional authorization requirement for foreign loans periodically restricts Costa Rica's financial flexibility, is another of the risk qualifier's arguments.
Costa Rican authorities informed that Citi Global Markets and HSBC Global Banking will be the placement banks and financial advisors that will accompany the country in the process of issuance of securities and management of liabilities in the international market.
The issue that will be made at the international level is the one that was approved on July 16 through Bill No.
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.
The Central Bank expects to issue Monetary Stabilization Bonds during the second semester of the year, for the equivalent of $792 million.
The Central Bank of Costa Rica (BCCR) will maintain the issuance strategy carried out in recent years, issuing bonds through competitive auctions. Specifically, there will be monthly auctions of zero coupon instruments for 6 and 12 months, as well as fixed rate bonds for 2 years, the institution said.