Friday 18 June 2021

Spread on Costa Rica’s 2023 Bonds Widens to Record, Yield Jumps

QCOSTARICA (Bloomberg) The extra yield investors demand to hold Costa Rican bonds instead of similar-maturity U.S. Treasuries widened to a record as the country struggles to contain a growing fiscal deficit.

costa-rica-bondsThe extra yield, or spread, on the Central American nation’s 2023 bonds climbed to 354 basis points, the most since the bonds were sold in November 2012. Yields have jumped 65 basis points, or 0.65 percentage point, since Dec. 4 to 5.70 percent.

Officials at Costa Rica’s Finance Ministry didn’t immediately respond to a message left by Bloomberg News.

- Advertisement -

The government may sell as much as $1 billion in global bonds next year to finance a fiscal deficit forecast to widen to 6.7 percent of gross domestic product, up from a projected 6 percent this year. The Finance Ministry said it will present congress a long-awaited plan in the coming weeks to convert a 13 percent sales tax into a value-added tax and raise the rate to 14 percent in 2016 and 15 percent in 2017.

“The market is adding together the fiscal issue and the new emission we’ll have in 2015,” said Carolina Hernandez, head of market negotiations for local trading firm Aldesa. “We aren’t seeing fiscal reform and all this adds up to Costa Rica’s bond prices being punished.”

Moody’s cut Costa Rica’s credit rating to Ba1 from Baa3 in September, citing the country’s failure to rein in the deficit and obstacles to passing new tax legislation.

- Advertisement -

We strive for accuracy in its reports. But if you see something that doesn’t look right, send us an email. The Q reviews and updates its content regularly to ensure it’s accuracy.

"Rico" is the crazy mind behind the Q media websites, a series of online magazines where everything is Q! In these times of new normal, stay at home. Stay safe. Stay healthy.

Related Articles

American woman found lifeless in hotel bathroom in Sabana

QCOSTARICA - A sad discovery occurred this Thursday morning in a...

Tourism sector depends on political will for recovery

QCOSTARICA - The future of tourism operators in Costa Rica depends...


Opinion: Peru’s electoral drama is damaging democracy

Q REPORTS (DW) In Peru, the left-wing village school teacher Pedro Castillo has in all probability been elected the new president. The fact that...

Bribed with cars, sexual favors and money in exchange for road works contracts

QCOSTARICA - The OIJ uncovered a big pothole on Monday when it was announced that public officials had allied with construction companies that, apparently,...

New Television Program To Promote Family Fun

Q ENTERTAINMENT - Attention families of Costa Rica! A new contest program, led by Douglas Sánchez and Verónica González, is looking for participants who...

OIJ investigation into road works corruption leads to inquiries in Panama

QCOSTARICA - The prestige of the company of some of the richest men in Costa Rica hangs by a thread. For many, the MECO...

The “rebound” effect boosted growth in Costa Rica’s economic activity

QCOSTARICA - Costa Rica's economic activity registered in April 2021 a year-on-year growth of 8.8%, a figure affected by a “base” or “rebound” effect,...

Construction companies that paid alleged bribes would be disqualified for ten years

QCOSTARICA - If it is proven in a final judgment that they did pay bribes to Conavi officials, several companies could be disqualified from...

The Best Sports To Play On A Beach

Costa Rica has some of the best beaches in the world. The coastline is blessed with golden sand, beautiful palm trees, and perfect blue...

Since 2018 MECO has received contracts from the State for more than ¢139 billion

QCOSTARICA - Almost ¢140 billion colones (US$227 million dollars) is the amount the MECO construction company was able to snare for public works contracts...

On Monday the vehicle restriction will change, again

QCOSTARICA - In times of pandemic, things change constantly, especially when it is necessary to tighten the belt to reduce the contagion of covid-19. The...


Get our daily newsletter with the latest posts directly in your mailbox. Click on the subscribe and fill out the form. It's that simple!

Log In

Forgot password?

Forgot password?

Enter your account data and we will send you a link to reset your password.

Your password reset link appears to be invalid or expired.

Log in

Privacy Policy

Add to Collection

No Collections

Here you'll find all collections you've created before.