Guatemala is tapping global markets for the first time in nearly a year in a bid to take advantage of investor sentiment after a pair of recent credit-rating upgrades.
(Bloomberg) — Guatemala is tapping global markets for the first time in nearly a year in a bid to take advantage of investor sentiment after a pair of recent credit-rating upgrades.
The Central American nation is selling dollar notes due in 2036 with initial price talk suggesting a yield described as very high 6%, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it.
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The bonds will have three equal amortizations in 2034, 2035 and 2036, the people said. Santander is the sole bookrunner for the deal.
The offering comes in the wake of twin credit-rating upgrades by S&P Ratings and Fitch Ratings, which both boosted Guatemala’s score in recent months to BB — two levels below investment grade. Moody’s Investors Service rates the nation a level lower at Baa3, with a stable outlook.
“Cautious fiscal and monetary policies have stabilized Guatemala’s economy and should support continued GDP growth,” S&P analysts including Omar De la Torre wrote in an April statement.
Guatemala last sold debt in global markets in August, when it priced a $500 million seven-year note at a yield of 5.45%. The 2029 bonds edged higher on Tuesday to about 96 cents on the US dollar, according to indicative price data collected by Bloomberg.
The nation is joining a relatively small cohort of Latin American bondsellers this year as major central banks keep borrowing costs high. Countries in the region have sold just $15 billion of hard-currency debt so far in 2023, the lowest amount for the same period of any year since 2012, according to data compiled by Bloomberg.
–With assistance from Esteban Duarte and Christopher DeReza.
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