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.
The Central American Bank for Economic Integration approved a line of credit for the country to finance works to expand coverage, energy efficiency and resilience to climate change.
The funds will be used to finance part of the Development Policy Operations Program (OPD) to support the country in implementing the General Law on the Electricity Industry (LGIE).
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.
As of November 2019, the external debt of the private sector reached Ch$1,722 million, which is 5% higher than that reported at the end of 2018.
From the Central Bank of Honduras report:
At the end of November 2019, the total external debt (public and private) registered a balance of US$9,031.0 million, higher by US$14.7 million than the one presented in December 2018.
Up to September 2019, the external debt of the public sector reached $7.285 million, a figure that is $93 million lower than that reported at the close of 2018.
From the Central Bank of Honduras report:
At the end of the third quarter, the external debt of the public sector registered a US$7,285.0 million balance, decreasing 1.3% (US$92.9 million) compared to December 2018.
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.
Up to August 2019, the external debt of the public sector amounted to $7.290 million, a figure that is $88 million lower than that reported at the close of 2018.
From the Central Bank of Honduras report:
The public sector recorded an external debt balance of US$7,289.9 million up to August 2019, lower by 1.2% (US$88.0 million) compared to the closing of the previous year.
Up to July 2019, the external debt of the public sector reached $7.310 million, a figure 2% higher than that reported in the same month of 2018.
From the Central Bank of Honduras report:
The public sector external debt balance was US$7,310.2 million at the end of July 2019, US$67.7 million less than at the end of 2018. The above is explained by a net amortization of US$47.7 million (capital payments made for US$173.5 million that surpass the disbursements received for US$125.8 million) plus an adjustment for favorable exchange variation that reduces the balance by US$20.0 million, product of the appreciation of the US dollar against other currencies.
Regarding the figure for the end of the first half of 2018, up to June of this year the external debt of the public sector of Honduras increased by $163 million.
From the Central Bank of Honduras report:
At the end of the first semester of 2019, total external debt (public and private) registered a balance of US$9,035.1 million, higher by US$16.2 million compared to December 2018.
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.
Standard & Poor's explained that continuity in economic and investment policy next year, and overall political stability, support the decision to keep the rating at BB- with a stable outlook.
We could raise the ratings next year if a faster and more effective implementation of the expected energy reform strengthens Honduras' economic growth and fiscal flexibility above our expectations, the risk qualifier explained.
Moody's kept the rating of long-term issues and senior unsecured bonds at B1, arguing that there is a "solid fiscal framework that has stabilized debt at lower levels compared to its rated peers.
Honduras' fiscal balance behaves favorably with respect to GDP and has been enough to stabilize overall government debt at around 41% of GDP, Moody's report explains.
With regard to the figure for the end of the third month of 2018, up to March of this year the external debt of the public sector of Honduras increased by $151 million.
The balance of Honduras' total external debt stood at $9,008.7 million at the end of March 2019, $10.2 million less than that of December 2018, a result of a favorable exchange variation that reduced the balance by $12.9 million and net utilization of $2.7 million (disbursements received by $365.4 million, partially offset by capital payments of $362.7 million), explains a report by the Central Bank of Honduras (BCH).
The entity and the Honduran government agreed to "a combined credit facility of Special Drawing Rights and 24-month Extended Credit Service, for $311 million."
For the country's business sector, the agreement between the International Monetary Fund and Honduras "represents a commitment by the government to maintain macroeconomic stability, a fundamental pillar that favors the country's competitiveness and creates the minimum conditions for the promotion of investment. See "Cohep Expects IMF Agreement to Maintain Macroeconomic Stability".