Dominican Rep allocates USD 1.25 bn in Sovereign Bonds

DOMINICAN REPUBLIC - In Brief 30 Apr 2014 by Pavel Isa
On 24 April, the Dominican government announced the allocation of USD 1.25 bn in Sovereign Bonds of 30 years term at a yield of 7.45%. This rate is below the yield in the secondary market of all 30-year Sovereign Bonds of countries rated B in the date of the issuing. The demand for the bonds reached USD 3 bn, almost three times the amount of the issuing, a remarkable demand for a 30-years bond of a country with a sovereign rating at B1 / B + / B. Countries with a similar risk rating that have allocated bonds with 30 years of maturity are the following: Uruguay in 2006 (7.625%); Pakistan in 2006 (7.875%); Indonesia in 2005 (8.50%); and Jamaica in 2006 and 2007 (8.50% and 8.00% respectively). One of the most important domestic consequences of this issuing is the creation of a long-term reference for all local and foreign companies wishing to invest in long-term projects in the country, allowing greater certainty about the capital rate of return.

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