JAN
2020
On January 23rd, 2020 the Ministry of Finance of the Dominican Republic placed a total amount of US$2,500.0 million in the international capital markets. In the transaction de Republic placed USD denominated bonds of 10 and 40 years maturities, at rates of 4.5% and 5.875%, and amounts of US$1,000.0 and US$1,500.0 million respectively.
This issuance is part of the Annual Financing Plan contemplated in the National Budget for 2020 approved by Law No.506-19, as well as by Law No. 512-18 on Public Debt Securities. The resources received from these placements will allow the implementation of the public investment plan of the year, and meet the Government’s obligations.
As in previous years the Republic conducted a successful transaction with total demand well above the amount offered by the country. Total demand received was approximately US$8,421 million dollars, more than four times the amount offered.
The book closed with more than 200 orders of demands that came from investors from different countries and regions, including Unites States, Europe, Latin America and local investors.
The demand and financial conditions received once again evidence the investor’s positive valuation of the excellent economic performance, exchange stability, public finances and debt management conducted by the country, and its perspectives.
The 10-year issuance for US$1,000.0 million was placed with an interest rate of 4.50%, the lowest issued by the Dominican Republic for this maturity.
With this transaction the country achieves another historic milestone with the it’s first 40-years bond issuance, the longest maturity ever issued by the Republic, at an interest coupon rate of 5.875%, the lowest rate of a 30-years or longer bond issued by the country. This conditions along with the demand received for this instrument of US$5,353 million, more than 3.5 times the offered amount, reflects the great confidence of investors in the future of the Dominican economy. This long term issuance is in line with the Dominican Government's strategy to continue reducing the public debt portfolio risk’s, extending the portfolio’s maturity.
The conditions obtained in these transactions will extend the average term to maturity from 9.7 years to 11.0 years, while, maintaining the average interest rate levels of the portfolio.
The Dominican team was led by the Minister of Finance, Donald Guerrero Ortiz, with the support of the Public Debt Office and Ministry of Finance technical staff. The transaction closed with J. P. Morgan and BNP Paribas as manager book-runners.
