Costa Rica places 1.5 billion dollars in Eurobonds to refinance debt
In an operation to cover state budgetary needs, including the refinancing of public debt, Costa Rica on Tuesday placed $1.5 billion in Eurobonds in the international market, financial sources reported.
The placement consists of two bonds, one for $1.2 billion due on February 19, 2031 at a rate of 6.25%, according to the financial groups that participated in the placement.
The other bond, for $300 million, expires in 2045 and has a rate of 7.25%.
The Costa Rican government asked the Legislative Assembly for authorization to place $6 billion in Eurobonds to cover its financing needs without resorting to the local financial market, which generates pressure on interest rates.
However, the Legislature instead authorized $1.5 billion and urged the government to subsequently request authorization for the remaining amount.
Representatives of the private sector expressed concern about the low amount of placement.
“While these resources come to contribute to the financing of short and medium term needs without pressing interest rates within the economy, the amount collected is relatively small compared to needs,” said Orlando Soto, director of the Acobo financial group.
The bonds were placed by banks HSBC and Citi Group.
Costa Rica has turned to the international market in search of financing to cover its expenses due to a large fiscal deficit, which in 2018 reached 6% of gross domestic product (GDP).
Last year, the country passed a law to clean up its public finances. The fiscal reform includes tax increases to contain the deficit.
The fiscal sanitation initiative allowed the country to return to the international financial market in search of resources.
You may be interested
U.S. donates $16,000 to help Costa Rica improve environmental reportingThe Tico Times - January 25, 2020
A donation from the U.S. Department of the Interior will help Costa Rica's Environment Ministry (MINAE) receive and track environmental…
In Davos, tourism industry promises less plastic and more sustainabilityPol Costa / AFP and The Tico Times - January 24, 2020
Faced with the tons of disposable plastic used by hotels every year, the CO2 emitted by airplanes or the overcrowding…
Meet Costa Rica’s newest NASA figure: Luis Diego Fonseca FloresBruce Callow - January 24, 2020
Costa Rica may be small, but its people are achieving great things. In this story, contributor Bruce Callow shares an…