|
According to Minister Aguilar
the main advantage of the
renegotiation of debt with
Eurobonds is a reduction of
1.15 percent of GDP. / A.M.
Costa Rica wire services photo
|
Minister
of Finance asks deputies to
reconsider amount approved for
Eurobonds project
By the
A.M. Costa Rica staff
The Minister of Finance Rocío
Aguilar requested Wednesday that
the deputies who make up the
Permanent Commission of Economic
Affairs "reconsider" the amount
approved to raise Eurobonds.
"I understand that it is not
possible to have the $6 (billion),
I understand that what is there is
$1.5 (billion) but I would like to
reconsider at least to show the
market a little more than a year
and if that:" more than a year
"can be two or three (referring to
years), it seems a good sign to
the market," said Aguilar.
The minister had insisted for
months that the country should
borrow a total of $6 billion
dollars to have funds for the
coming years, but the deputies
decided that the amount should be
reviewed and voted every year.
According to the minister, having
the $6 billion was more a message
to international markets that
there was a possibility of
financing later because, despite
fiscal reform, the financial needs
for the coming years are
important.
Minister Aguilar was clear that
"it is practically impossible that
bonds can be captured in the local
market."
The Commission had approved the
file 21201 Authorization Issuance
of Securities in the International
Market and Hiring of Lines of
Credit.
The project grants an
authorization to the government
through the Ministry of Finance,
to issue securities to be placed
on the international market within
the parameters required by this
law, to convert domestic debt into
external debt or cancel external
debt to improve conditions in
terms of term, effective interest
rates with respect to the debt
that would be being paid with
these resources.
The amount approved for this
placement is up to $1.5 billion,
which may also be placed in
equivalent in any other currency,
during the following year after
this law is approved.
To be able to carry out the
respective placements, the
Ministry of Finance must submit to
the Legislative Assembly the bills
containing the contracts
negotiated with the international
financial organizations.
"The project opens the opportunity
for the government to conduct
financial derivative transactions
through the direct contracting
mechanism, in order to propitiate
a balance between the cost and the
risk of the government's debt,"
said Congress in its statement.
The Ministry of Finance said that
this project known as Eurobonds
becomes strategic as it provides
room for improvement in the risk
management of the portfolio by
reducing the concentration in
short-term securities and fixed
rate, improving exposure to risk.
The government may
exchange, consolidate, convert,
renegotiate or restructure any
of the country's debt still in
circulation in the national and
international markets, as well
as new issues authorized by this
law, "as long as it results in a
benefit for the country," said
the legislature in its
statement.
According to the deputy Luis
Ramón Carranza, "today more than
ever we are asking to the
Government Economic activation
so that resource in some way
comes to contribute with the
issue of employment and the
issue of economic reactivation
".
On March, as A.M. Costa Rica
reported,
Minister of Finance, Rocio
Aguilar, met with the deputies
of the National Liberation
political party to clarify
their doubts and request
support for the bill presented
by the government.
Minister Aguilar stated that
"the purpose of the Eurobonds
is that the country can
capitalize on a fiscal reform
that took many years and turn
it into opportunities with
better financing for economic
reactivation."
The meeting with the deputies
of the National Liberation
Party was the last of the
meetings held by Minister
Aguilar with all the parties
of the Legislature.
Minister Aguilar said that the
project to issue Eurobonds
does not mean more debts for
the government, only a
renegotiation of the part of
the current debts, "in much
better conditions, at rates
much lower than what we would
be paying here" (referring to
local bonds market).
According to
Minister Aguilar the main
advantage of the
renegotiation of debt with
Eurobonds is a reduction of
1.15 percent of GDP.
-------------------------
Is using this new Eurobonds
project to restructure debt a
positive move for the
government? We would like
to know your thoughts on this
story. Send your comments
to: news@amcostarica.com
|
|
|
