The chief coordinator of the US$500 million in sovereign bonds, economist Andres Dauhajre, highlighted in the Listin Diario several of the advantages the bonds offer to private business and the nation. In his weekly economic page, he outlines the following advantages: 1) The bonds will create the conditions for the private sector to turn to international capital markets. The 9.5% yield of the first issue will serve as reference point so the private sector can seek financing at interest rates lower than those it got prior to the bond issue. 2) Will serve as support to the present government policy of maintaining macroeconomic stability. 3) Will improve the country’s international reserves and improve the risk rating of the country. 4) Will foster a further decline in interest rates, increasing the potential for more private investment. A decline in interest rates will improve the quality of bank loan portfolios which will in turn reduce further the country’s risk rating for foreign investment. 5) Will allow the government to proceed with important investments in infrastructure projects of high yield. Will stimulate services, commerce and industrial goods sales which will contribute to reactivating the economy. 6) An increase in economic growth will translate into an increase in fiscal revenues and resources that the government will be able to use to sustain programs to help lower income families.
