​DR Government places foreign bonds and carries out liability management operation

DOMINICAN REPUBLIC - In Brief 19 Feb 2022 by Magdalena Lizardo
The Ministry of Finance reported that sovereign bonds were placed in the international capital market for USD3.56 b. About USD2.3 b will finance the 2022 Public Budget, covering 63.6% of the total external financing to be contracted in accordance with Law 345-01. The remaining USD1.26 b are destined for the management of liabilities. Law 345-01 authorized the Ministry of Finance to carry out this type of operation in an amount of up to 10% of the balance of the Non-Financial Public Sector debt. As of December 2021, this debt amounted to USD47.6 b. As a result of the operation, the cost of the debt is reduced by 3 basis points, the average maturity of the bonds in USD increases by 0.3 years and the debt service will be reduced by USD1.1 b during 2022-2024, of which USD 0.19 b corresponds to 2022. The demand for the new bonds amounted to USD8.5 b. The total final amount issued of USD3,564 was structured in two tranches of USD1.78 b each, one maturing in 2029 and a 5.5% coupon and the second maturing in 2033 and a 6.0% coupon.

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