A new issue of sovereign bonds yesterday made the Government in the international capital market for a total of $ 3,000 million. The papers were placed at 10 years term with an interest rate of 7.875%, reported the Ministry of Finance, which describes the conditions obtained as evidence of the confidence of foreign investors.
Nearly $ 10,000 million was the demand for the papers, an operation carried out with institutions in the United States and Europe.
The recent issue was part of the agenda for the first quarter of 2018, as anticipated by Finance Minister Carlos de la Torre, in an interview with newspaper EL TELÉGRAFO on December 29. At that time, he pointed out that the feasibility of making placements through Eurobonds was also analyzed, because they offer different interest rates and terms than the structures in which the country entered in recent years.
The $ 3,000 million, says the Ministry, will be used to partially finance the Annual Investment Plan for 2018. But it does not detail which works will benefit, nor the amounts to be allocated. It is the second placement during the administration of President Lenin Moreno.
The first was in October 2017 for $ 2,500 million for a 10-year term and a punishment of 8,875%. The current bonds have the lowest interest rate since Ecuador was re-financed through the capital market in 2014. It is also the largest sum in a single issue, according to the financial records.
Although the new operation reflects slightly better conditions, for the economist Rosa Matilde Guerrero, the mechanism increases the weight of the public debt in relation to the Gross Domestic Product (GDP) and impairs the country’s ability to pay.
“This last issue will represent an additional $ 240 million in interest payments. It’s like a parent who does not have enough income to pay and has to keep borrowing, “Guerrero said. (I)