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
Costa Rica announces new restrictions to limit mobility in Greater Metropolitan AreaAlejandro Zúñiga - July 10, 2020
Costa Rican authorities on Friday announced a series of health measures to limit mobility in the Greater Metropolitan Area, which…
Costa Rica coronavirus data for July 10, 2020Alejandro Zúñiga - July 10, 2020
Costa Rica confirmed 360 new cases of the coronavirus over the past day, totaling 6,845 cumulative known cases, the Health…
News briefs: WHO says Costa Rica facing community transmission of coronavirusThe Tico Times - July 10, 2020
The coronavirus crisis has transformed life in Costa Rica, which has enacted measures to protect the capacity of its health…