With this transaction, payment obligations for 2021 have been reduced by approximately US$427 million
For the first time in its history the Dominican Government, represented by the Ministry of Finance, presented capital markets with an offer to buy back its securities maturing in the years 2021, 2024 and 2025, in order to considerably reduce debt service obligations for those years.
A total of US$1.26 billion was canceled with this Liability Management Operation, reducing the cost of public debt and increasing the maturity profile of the global bond debt portfolio in US dollars, by replacing said titles with a reopening of the 2032 bond, which has a longer maturity and has a significantly lower interest rate.
Through this transaction, a reduction in debt service for the 2021-2025 period of US$1,132 million was achieved, as well as a decrease in the cost of debt (interest service) from 6.16% to 6.06%, and an increase in the average maturity (life) of the global bond portfolio in US dollars from 17.19 to 17.79 years, with a minimum increase in the total public debt of US$6.1 million (0.01% of the Non-Financial Public Sector’s total debt) in 2032, thus having a double effect in reducing refinancing risk.
"This unprecedented transaction strengthens the country's position in global financial markets by evidencing a proactive management of the maturities, profile and sustainability of the country's public debt," said Finance Minister, Jochi Vicente.
The Operation provides greater flexibility for the Government in 2021, since payment obligations for that year have been reduced by approximately US$427 million, creating the space to use the approved amount for social impact projects considered as prioritie.s
The Vice Minister of Public Credit, María José Martínez, said that this operation demonstrates with concrete facts that this administration has a firm commitment to ensure a proper debt management.