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The Government’s bond repurchase transaction improves the debt portfolio and average time to maturity

The new DOP linked bond increases visibility of local currency in the international markets

Santo Domingo. - This Tuesday, the Dominican Government, through the Ministry of Finance, completed the successful repurchase of DOP40,792.05 million in global DOP linked bonds with 2026 maturity.

The Ministry of Finance explained that offers received since September 5th, when it was announced to investors, represented 59.97% of the outstanding principal amount.

For the repurchase, the country issued DOP-Linked bonds maturing in 2035 valued at DOP71,000 million (USD1,252.18 million), with a coupon of 11.25%, receiving offers for DOP154,767 million, equivalent to 2.2 times the demand for the subscribed amount.

Minister of Finance, Jochi Vicente, assured that the success of this transaction demonstrates investor confidence in the proactive debt management as well as in the commitment to ensuring risk indicators remain sustainable.

“When we go out to the capital markets, both domestic and international, we have seen investor demand for our bonds and that is a sign that we are managing public finances correctly, because no one invest their money where they have no guarantees.” Vicente said.

He specified that the transaction, which was carried out taking advantage of favorable market conditions, allowed for the repurchase of the bonds maturing in 2026 while the rest of the resources will be allocated to the financing needs contemplated in the General Government Budget for 2023.

He highlighted that this bond issuance in Dominican pesos allows a reduction in the proportion of foreign currency denominated debt in the non-financial public sector’s debt portfolio, decreasing to 68.7%, from 71.8% as of January 2023 mitigating the exchange rate risk on the fiscal accounts. In turn, this transaction increases the average time to maturity by 0.23 years, reducing the governments refinancing risk.

Similarly, the Minister highlighted that the demand for this new bond demonstrates investor credibility in the Dominican currency and increases its visibility in the international market.

Meanwhile, Vice Minister of Public Credit, María José Martínez, added that the results of this transaction give continuity to the Government’s firm commitment to executing its medium-term debt strategy, reducing both refinancing and exchange risk, in line with the goal of achieving Investment Grade rating.




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