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).
During February 8 and 9, the Ministry of Finance was able to renegotiate close to $130 million corresponding to maturities of domestic debt securities for the years 2021 and 2022.
This is the first exchange of domestic debt in colones to take place in 2021. In this session, the Ministry of Finance managed to renegotiate debt bonds for ¢79,814 million, equivalent to close to $130 million.
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.
Through a competitive auction of domestic debt securities denominated in Colones, on November 9 the Costa Rican government issued the equivalent of $106 million in the primary market maturing in 2024, $81 million in 2026 and $27 million in 2031.
With this allocation the Treasury reached 80.6% of the maximum amount of issuance for ¢1.8 billion, announced last August 25, during the presentation of the debt plan for the second half of the year, the authorities informed.
Although the Alvarado administration reversed the initial proposal to ask the IMF for $1.75 billion in financing and called for an inter-sectoral dialogue, Costa Rica is semi-paralyzed by the blockades that are taking place on various roads in the country.
The Central Bank announced that for the first half of 2020 it expects to issue $438 million in the primary market, as Stabilization Bonds.
From the BCCR statement:
San José, February 27, 2020. Consistent with monetary policy goals, the Central Bank of Costa Rica expects to carry out an issuance of Monetary Stabilization Bonds (BEM), in the primary market, for ₡250.000 million.
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.
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.
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.
The aim of the government's debt plan for the second half of the year is to capture up to $2.43 billion in the local market, in addition to the $1.5 billion expected to be placed in the international market.
In its strategy for the coming months, the Government will manage liabilities (swaps and reverse auctions) for the series maturing in both colones and dollars.
Although the Legislative Assembly approved the issuance of $1.5 billion of debt in the international market, Fitch Ratings believes that in the coming years there could be renewed uncertainty about the sources of financing for the Costa Rican government.
The Legislative Assembly of Costa Rica approved in second debate the bill that authorizes the government to issue up to $1.5 billion in bonds in the international market.
The Ministry of Finance (MH) reported that with the approval of Bill No. 21.201, which was made on July 16 as planned, the Executive is authorized to administer, issue and manage financing operations in the international market up to an amount of $1.5 billion (one thousand five hundred million U.S. dollars), during the following year after the law was approved.
The Legislative Assembly approved in first debate the issuance of $1.5 billion in debt securities in the international market, which in the opinion of the rating agencies, helps to reduce uncertainty about the government's ability to meet its financing needs.
The Treasury Department's initial plan was to issue $6 billion within six years, however, the committee in charge of the file modified the text so that the limit would be $1.5 billion.
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