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.
Authorities from both countries agreed to work on the unification of their stock markets, starting with the issuance of a quota of Guatemalan subsidized debt directed to Salvadoran investors.
Representatives of the Guatemalan Ministry of Finance and the Ministry of Finance of El Salvador informed that before the end of this fiscal year, the Guatemalan subsidized debt will be approximately $13 million.
The Ministry of Finance Awarded Treasury Bonds in local currency for an equivalent amount of $19 million, at a cut-off rate of 6.2% and expiring in August 2034.
In the event of issuance of Electronically Registered Representative Certificates in Custody in the Banco de Guatemala, a demand for $42.9 million was received, corresponding in its entirety to the maturity date of 11/23/2039.
The Ministry of Finance of Guatemala issued Treasury Bonds in local currency for an amount equivalent to $19 million, maturing in May 2039 and at a cut-off rate of 6.6%.
The global amount awarded of Treasury Bonds of the Republic of Guatemala up to date, including those made through public biddings and auctions ascended to Q.17,277.9 million ($2,243.9 million), corresponding to Fiscal Year 2019, informed the Ministry of Finance.
Up to August, the external and internal public debt amounted to $18.463 billion, equivalent to 23.4% of the country's Gross Domestic Product.
According to figures from the Ministry of Public Finance, in the last nine years the debt to GDP ratio has slightly varied, between 23.3% and 24.8%.
Regarding the country's indebtedness level, Abelardo Medina, senior economist at the Central American Institute of Fiscal Studies, said to Dca.gob.gt that "... It is interesting to note that, although Guatemala reports the lowest level of debt in the region and one of the lowest in the world, the evaluation given by risk rating agencies does not reach investment level. This is a product of political instability but, especially, it is due to the limited size of its fiscal revenues."
Citing a long history of fiscal and monetary policy characterized by prudent management, the rating agency Moody's maintained the country's credit risk rating in Ba1.
From a statement issued by the Bank of Guatemala:
June 2018.Moody's Investors Service maintains the credit risk rating for Guatemala at Ba1 with a stable outlook.
The new administration has announced that the placement will be in the local market and resources will finance the 2016 budget.
The Ministry of Finance (Minfin) has released the rules for the bond issue and financing needed to make up the shortfall in resources for the new Guatemalan government.
Julio Héctor Estrada, head of the branch, told Elperiodico.com.gt that "we will be turning to the local market next week.
The Ministry of Finance issued $ 10.5 million in dollar-denominated securities and $ 103 million in Quetzales (Q802 million).
Most of the placement was made at 12 and 15 years, $ 66 million and $ 16 million, respectively, paying interest of 8.8% and 9% respectively in Quetzales.
As reported by Prensalibre.com, 67% of the issuance was sold to the private sector.
In the auction held on Tuesday, the Finance Minister issued $28.38 million worth of bonds with terms of 11 and 15 years, paying interest of 8.6% and 9.0% respectively.
The event, which took place in the local exchange, saw the minister receive offers for a total of $39.64 million, with 96% coming from private investors and the rest from the public sector.
After the first auction, the finance ministry issued just $48 million in bonds, even though domestic investors demanded $308 million.
In a press release, the ministry explained that “interest rates offered by investors were not adequate”.
Authorities only placed 15-year securities, paying a 9% interest rate in local currency. 72% of the market’s demand was focused on 10 and 15-year securities.