Low interest rates in the international market have favored Costa Rican sovereign debt bonds which are yielding better dividends.
Higher rates paid out by Costa Rican bonds with their associated risk level, coupled with an international context of low interest rates, has led to increased demand for foreign debt bonds, which "... have appreciated between 14% and 30%" so far this year.
The Real Estate Development Fund Monte del Barco has signed a contract with Rosewood Hotels & Resorts chain, to develop a 130 room luxury hotel in the Gulf of Papagayo in Guanacaste.
A statement issued by Aldesa, manager of the Real Estate Development Fund Monte del Barco, states that "... Hotel Monte del Barco will proceed immediately with the architectural design for the hotel with the firm HKS based in Dallas, as well as the arrangements for raising the capital needed for construction, which is estimated at approximately $100 million. "
Although they have recovered the upward trend seen before Moody's withdrew the investment grade rating, they still have not returned to the pre-announcement levels.
Prices of Costa Rican debt securities increased between 1.2% and 4.5% on the international market, with those with a maturity of 2043 registering the highest increase, "... which ended up being traded at a price of 83% on 17 September, registering 87.5% on 27 October.
The risk premium demanded by investors for the Costa Rican international bond due in 2023 rose from 2.10% to 2.56% between June and September 2014.
Investors could be moving towards a degradation of the sovereign rating of the country, a possibility already suggested by Fitch rating agency.
An article on Nacion.com reports that "... Since last June, the extra rate of return that foreign savers demand for Costa Rican Government's securities in respect to United States Treasuries (so-called risk premium or margin) has gone. "
The volatility of the exchange rate (measured by the standard deviation of 15 days MONEX) is at the lowest level of the year and similar to the levels recorded in December 2013, when the exchange rate was quoted at the "floor" exchange rate bands.
The fall in interest rates has caused an increase in bond prices, encouraging holders to make profits.
During the first quarter of 2013, the stock market in Costa Rica grew by 18%, with the secondary debt market being the best performing, going from $1.34 billion in the first three months of 2012 to $3.459 billion in the same period of 2013.
A new placement of Eurobonds has caused bond prices to drop, both in the domestic and the international market.
Nacion.com reports that "the most notorious drop is in the external trading bond which matures in 2023, which was issued last year and whose price in January reached 104%, and which on April 2 traded at 100.86%. "
Aldesa introduced an investment fund made up of $100 shares to finance the Ad Astra Rocket Company, which is developing a plasma engine for space travel.
A press release by Aldesa states that the fund, entitled “the Aurora Fund”, will be administered by INS SAFI investment and will invest in shares of the Ad AstraRocket Company, which was founded and chaired by astronaut Franklin Chang Diaz.
Greater knowledge of these financial tools is driving their use in the country.
Equity and Guarantee Trust funds are the most popular of these types of instruments in Costa Rica, where more and more companies and individuals are choosing to manage their properties using this alternative.
The Finance Ministry initially offered $10 million in certificates but after a surge in demand ended up issuing $62.8 million in dollar bonds maturing in 2025.
Although the initial amount put up for auction was $10 million, bids for these certificates in the market totaled $65 million, that is to say 6.5 times the amount to be auctioned.
The entity did not miss out on the opportunity, and to everyone’s surprise assigned a total of $62.8 million.
The real estate developer of tourism projects expects to raise $ 10 million in order to fund construction works in 2011.
Lanzo Luconi, director of Aldesa Investment Fund, the concessionary of the project, said that they still have not defined how many acres will go on sale, as well as the size of the lots.
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