News BONDS - Government places US $ 2.5 billion of...

BONDS – Government places US $ 2.5 billion of bonds in the international market

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Santo Domingo, RD.

The Government placed in the international capital market bonds equivalent to 2,500 million dollars in terms between 10 and 40 years, with rates of 4.50% and 5.875%, and amounts of US $ 1,000 million and US $ 1,500 million, respectively.

This was reported by the Ministry of Finance, who said that the placement is part of the financing plan for this year, approved and duly recorded in Law No. 506-19, which approves the General State Budget for the year 2020, as well as in the Public Debt Securities Law. The resources received will allow compliance with this year’s investment plan and meet the Government’s obligations.

The 10-year issue for USD1,000 million with an interest rate of 4.50%, the lowest issued by the Dominican Republic for this period, as well as the placement for the first time of a 40-year bond, the longest-term instrument issued by The country, at an interest rate or coupon of 5,875%, the lowest issued for a bond with maturity greater than or equal to 30 years, constitutes a historical milestone in the trajectory of the Republic in international capital markets.

These conditions, together with the demand received for the instruments of US $ 8,421 million, more than 4 times the amount offered, are an important reflection of the firm conviction that investors have in the future of the Dominican economy. In addition, they will allow extending the average term of maturity of the debt from 9.7 years to 11 years, which reduces the risk of debt refinancing, while maintaining the average interest rate levels of the portfolio.

The long-term placement is carried out in line with the Dominican Government’s strategy to continue reducing the risks of the debt portfolio by extending the maturity terms of the same.

In total, more than 200 orders were received from investors from different countries and regions of the world, including the United States, Europe, Latin America and local investors.

With the demand and financial conditions received by these instruments, the confidence of the community of international investors in the perspectives of economic performance, exchange stability, and the management of finances and public debt is once again evidenced.

The transaction was carried out by a Dominican team led by the Minister of Finance, Donald Guerrero Ortiz, under the coordination of the General Directorate of Public Credit and the support of the Ministry’s technical team. The structuring banks were J. P. Morgan and BNP Paribas.

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