Café Britt to auction $10 million in bonds in Costa Rican stock market
Costa Rican coffee giant Café Britt has announced it will issue $10 million in bonds to the national stock market beginning March 2.
According to Café Britt’s founder Steve Aronson, with national interest rates currently low, the company felt the timing was right to auction off the bonds in the national market.
“We wanted to make a statement,” Aronson told The Tico Times. “So many other national companies choose not to invest in Costa Rican firms and instead buy government debt. We wanted to show that it can be done in Costa Rica. We think Costa Rica could be an incredible source of funding.”
On Wednesday night, national companies, investors and operators of pension funds began the bidding process to establish a fixed interest rate for the bond terms. Aronson said he expects the fixed interest rate on the bonds to be in the 5 to 6 percent range.
“We currently have a lot of inventory and investment in projects such as the new location in the airport, which opens in March,” Aronson said. “By doing this, we convert short-term debt into long-term debt at a fixed interest rate. With interest rates low, we assumed we could lock in a fixed low interest rate for the years to come.”
The issuance of $10 million in bonds is the first installment of an anticipated $20 million that Café Britt will auction off in the national stock market.
In response to Café Britt’s issuance of the bonds, the international enterprise rating agency Fitch Ratings gave the company a grade of AA-, one of the highest ratings offered by the agency. In an explanation of the high rating given to Café Britt, Fitch explained that the company has a “stable perspective” and is characterized by high operating margins, diversified revenues within several countries and a strong business strategy.
Café Britt, which was founded in Costa Rica in 1985, currently has 77 locations in nine different countries.
You may be interested
Costa Rica summons law IMF law projects to Legislative AssemblyAlejandro Zúñiga - January 26, 2021
The Executive Branch summed 36 bills to the floor of the Legislative Assembly for debate, including three that relate to…
Costa Rica to vaccinate entire adult population against Covid-19Alejandro Zúñiga - January 25, 2021
Costa Rica plans to vaccinate its entire adult population against the coronavirus and has signed a budget to accomplish that…
KLM says it will continue long-haul flights, but rebook passengersAlejandro Zúñiga - January 25, 2021
After initially saying that it would suspend all long-haul flights, KLM announced it has established coronavirus protocols that will allow…