Information about salaries of officials at the state run telecoms company has been released, which include the more than $4000 a month paid to a chauffeur.
EDITORIAL
An article in Prensalibre.cr reports that "... deputy Otto Guevara unveiled the list of salaries of 22000 officials working in the Costa Rican Electricity Institute (ICE) and Radiographic Costarricense (RACSA) and National Power and Light Company (CNFL), which included details of a light vehicle chauffer earning ¢2,132,854 ($4,000) a month. It also highlighted the 854,000 colones ($1,600) paid to a floral arranger and 6 million colones ($11,200) a month received by a public accountant and auditor, while a human resources assistant earns 3,372,536 ($6,300). "
In the second half of the year the Ministry of Finance plans to raise on the local market $1,800 million, 10% of what was raised in the same period in 2014.
Without solving the underlying problem of high public spending, the government is sticking with its strategy to issue debt in the Costa Rican local market, which not only increases the already swollen government debt, but also influences the structure of interest rates in the local market, pushing them up to compete for funds with other local market participants.
In the latest update to its emerging market index the entity changed its view of the relative weight of Costa Rican bonds from "Marketweight" to "Underweight".
An article in Elfinancierocr.com notes that "... The opinion of JP Morgan in making this move is centered around the fiscal deterioration suffered by Costa Rica and they argue that this has been sustained and that there is little chance that this trend will be reversed.
After the optimism over the lukewarm reduction in the continuous increases in the primary deficit of the government of Costa Rica, comes the harsh reality of the growing amounts for interest payments on the debt, which continues to increase.
EDITORIAL
Un artículo en Elfinancierocr.com reseña que "... Gasto total del Gobierno Central aumenta por intereses y gasto de capital." ...
Chinese Loans in Latin America are concentrated in countries that have difficulty getting finance from institutions such as the World Bank and the IDB.
An article in Espectadornegocios.com discusses "The risks of Latin America taking loans from China", outlining the characteristics of Chinese finance, its favorable aspects in relation to credit institutions in the West, and the constraints imposed for them to be granted.
Fitch, Moody's and Standard & Poor's are once again warning of the need to generate more revenue and cut public spending in order to avoid "negative consequences for ratings."
On average agencies provide a period of 12-18 months for the fiscal deficit and public debt to stabilize, while clarifying that "... the presentation of tax reforms is not enough to ensure a good perspective for the country.
The need to borrow every month in order to pay current account expenses is the main cause of the continuing increase in the central government's debt to GDP ratio.
At the end of 2014, total public debt, which includes the Central Bank of Costa Rica and other public sector entities represented 58.6% of all production. Rodrigo Bolaños, president of the Central Bank, said that "...
The entity is preparing, for the March 18, to place corporate debt at a 2 year term and a net rate of 5.25%, via auction on the National Stock Exchange.
From a statement issued by FCCA Investment Banking:
On Wednesday March 18 Banco Lafise Costa Rica a member of the prestigious Lafise Group with operations in Central America and the Caribbean, will auction on the National Stock Exchange 10-year bonds for $10 million, at a 5.25% rate, quarterly risk rating (SCR AA-) and (PCR AA).
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 agency has maintained the rating for sovereign bonds at "BB" but warned of the risks to which the economy is exposed if not a tax reform does not take shape.
From a statement issued by Standard & Poor's:
Standard & Poor 's Ratings Services has affirmed its' BB / B' rating on long- and short-term foreign and local currency sovereign bonds of the Republic of Costa Rica.
Fixed interest rates and longer maturities characterize the issue of securities to be made by the Ministry of Finance in the local market during the first half of the year.
The Ministry of Finance in Costa Rica has announced the borrowing plan for the first half of the year, which involves making issuances of debt of $2 billion (1,100,000 million colones), through different types of instruments, in dollars as well as colones.
An announcement has been made that the government has selected Deutsche Bank and HSBC to structure and place on the international market an issuance of debt of up to $1 billion, scheduled for February 2014.
In order to take advantage of any "window of opportunity" that may present itself in the international market in terms of rate conditions and demand for the issue, the government of Costa Rica has accelerated the process and selected Deutsche Bank and HSBC to lead the process of placement of public debt worth up to $1 billion.
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 "...
The National Power and Light company is preparing for midyear to issue preference shares for an amount estimated at between $50 and $100 million.
In order to address the financial crisis, improve the equity structure and pay in 2017 $28 million in bond debts, the Compañía Nacional de Fuerza y Luz (CNFL) will be issuing preferred shares for an estimated $50 to $100 million.