The opposition party-majority Senate approved bond issues for RD$6.39 billion yesterday. It also authorized the government to renegotiate the terms of the two sovereign bond issues that total US$1.1 billion. Another domestic bond issue was postponed until some of the terms could be defined.
The bond issues that were approved included RD$2.33 billion to provide capital for the Central Bank, RD$1.5 billion to provide funds for the BanReservas, the government commercial bank, and RD$2.57 billion to pay the internal administrative debts the government and its dependencies carry with the private sector. The Senate specified that half of the money would have to be used to pay debts that originated before 31 December 2000, and the remaining 50% will go to pay debts originating between 2001 and 2003 (during the Mejia administration).
The Senate tabled the proposed issues for RD$1.89 billion that would provide funds to buy back 50% of the 1999 internal bond issue. Senator Ramon Alburquerque explained that the RD$5.0 billion bond issue in 1999 only pays 7% and that the new bond issue for RD$1.88 billion would pay 20% interest.
Previous to the start of the session, leading members of the PRD delegation met with party president Vicente Sanchez Baret and National Planning Office director Guarocuya Feliz and presidential economic advisor Julio Ortega Tous.
The Senate decision smoothes the path for President Leonel Fernandez, as it complies with yet another of the requisites of the IMF agreement. With the Senate hurdle now passed, the legislation now goes to the Chamber of Deputies for final approval.