Instead of cutting back on spending, the State has once again called on the Legislature to approve borrowing another $900 million, which will bring total debt to a record of nearly $17 billion.
Currently it is estimated that GDP is around $25 billion, meaning that state debt represents 68% of national production, excluding interest payments.
The economist Claudio de Rosa, told Elsalvador.com that "...
The Ministry of Finance has awarded $35 million at a rate of 7.12% in treasury notes with a maturity date of 2025, $64 million at 7.35%, for 2027 and $93 million at a rate of 7.50%, maturing in 2030.
In the third and final tract of the issue authorized by the Legislature, the government has placed $18 million with maturities of 10 to 15 years and rates of 7.12% and 7.50% respectively.
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 "... hiring the services necessary to perform an eventual placement in the international market and / or operation of liability management."
The Ministry of Finance received offers for $205 million but only issued $188 million in tracts with maturities in 2025, 2027 and 2030, at rates of 7.12%, 7.37% and 7.50% respectively.
From a statement issued by the Ministry of Finance in Guatemala:
In terms of 10, 12 and 15 years and rates of 7.12%, 7.37% and 7.57% respectively, the government has issued treasury bonds for Q1,958.1 million, equivalent to $256 million.
Of the $366 million in treasury bonds approved by the Congress, 70%, which corresponds to $256 million, was placed by the Ministry of Finance in order to finance the budget for 2015, because the World Bank did not approved the loan of $340 million which was to be used for that purpose.
Between June and July, the government plans to place in the local market $250 million in Treasury bills in order to ease their financing needs, not addressed by Congress.
According to Pavel Centeno, Finance Minister the measure is in response to the Government not gaining Congress' approval for taking out loans.
Lack of flexibility in the loan approval in Congress is forcing the government to resort to other measures.
The Guatemalan government has announced that it will release short-term treasury bills, usually considered a financing tool for emergency liquidity due to their characteristics.
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