AUGUST 27. 2014
Paraguay Successfully Issues USD 1 Billion In Sovereign Bonds To Finance Infrastructure

Paraguay has recently issued sovereign bonds worth USD 1 Billion following a previous successful bond issuance worth USD 500 million in January 2013. This is the country’s largest-ever international issuance. With a positive outlook according to Moody’s, Paraguay’s economy is expected to grow 4.5% in 2014.

With Bank of America, Merrill Lynch and JPMorgan Chase & Co. acting as book runners, this 6.1 percent yield, 30-year issuance has been Paraguay’s most successful so far, compared with an average yield of 6.29 percent for similar maturity notes from countries sharing Paraguay’s Standard & Poor’s’ BB rating.  President Horacio Cartes stated that this yield is unprecedented for the country.

The proceeds will be used for highway, constructions and energy infrastructure, as well as agricultural production, with the Ministry of Public Works and Communications (MOPC) set to receive USD 350 million for infrastructure projects currently underway, the National Housing and Habitat Secretariat (SENAVITAT) USD 100 million for the construction of 5,800 housing units, and the National Cement Industry (INC) USD 67 million to invest in industry improvements. Similarly, the Ministry of Agriculture (MAG) would receive USD 50 million to invest in irrigation systems for small farmers and the National Electricity Company (ANDE) USD 100 million to be invested in the expansion and modernization of electric substations and improvement of transmission lines.

For more information about this bond issuance or related matters, please do not hesitate to contact us.


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