Government issues sovereign bonds valued at 3,564 million dollars

The Dominican Government, through the Ministry of Finance, carried out a bond liability management operation in US dollars with which a reduction in debt service of US$1.1 billion was achieved in the 2022-2024 period.

At the same time, a sovereign bond issue was made for US$3,564 million in the international market, of which US$1,264 million were allocated to the liability management operation and the rest, US$2,300 million, will be used to cover part of the planned external financing. in the General State Budget 2022.

Of the US$1,100 million reduction in debt service for the next three years, achieved with the liability management operation, US$190.3 million correspond to the year 2022. Likewise, this operation reduces the cost of debt by three basic points and increases the average maturity of dollar bonds by 0.3 years.

In a press release, the Ministry of Finance reported that this liability management operation, in which bonds in US dollars maturing in 2023 and 2024 were offered, including the CDEEE-2023 domestic bond, was extremely successful, receiving and accepting US $1,162.2 million of offers, which represents 83.6% of the total amount of circulation of the titles offered.

The operation was structured in two tranches of new bonds, the first maturing in 2029 and a 5.5% coupon, and the second maturing in 2033, at a 6.0% coupon. Both tranches were for an amount of US$1,782 million each, for a total of US$3,564 million.

The issue had a demand of US$8,500 million, that is, 2.4 times the amount finally awarded. The purchase offers came from investors from different countries and regions of the world, including the United States, Europe, Latin America, as well as local investors.

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“The high demand received in this transaction demonstrates the confidence of investors and the robustness of our economy, even in times of uncertainty in international markets,” said Finance Minister Jochi Vicente.

For her part, the Vice Minister of Public Credit, María José Martínez, highlighted the firm commitment that the Dominican Government has with the proactive management of public debt, through operations that maintain its sustainability and, in turn, ensure the resources external resources necessary to finance the 2022 General State Budget.

The Dominican team in charge of carrying out this transaction was led by Minister Vicente and Vice Minister Martínez, with the support of the technical team of the General Directorate of Public Credit.

The institutions that served as structuring banks for the transaction were Citigroup Global Markets and JP Morgan Securities.

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