2022News

Government announces US$1.1 billion debt service reduction for the years 2022-2024

The Ministry of Hacienda (Finance) reports carrying out a bond liability management operation in US dollars that reduces debt service by US$1.1 billion for the period 2022-2024.

The government also says that a US$3.56 billion sovereign bond issue was made in the international market, of which US$1.26 billion was used for the liability management operation and the remaining US$2.3 billion will be used to cover part of the external financing foreseen in the 2022 National Budget.

Of the US$1.1 billion reduction in debt service for the next three years, achieved with the liability management operation, US$190.3 million corresponds to the year 2022. Likewise, this operation decreases the cost of debt by three basis points and increases the average maturity of the bonds in dollars by 0.3 years.

In a press release, the Ministry of Hacienda informs that this liability management operation, in which US dollar bonds maturing in 2023 and 2024 were offered, including the CDEEE-2023 domestic bond, was extremely successful, receiving and accepting US$1.16 Billion of offers, 83.6% of the total outstanding amount of the securities offered.

The operation was structured in two tranches of new bonds, the first maturing in 2029 with a coupon of 5.5%, and the second maturing in 2033, with a coupon of 6.0%. Both tranches were for US$1.78 billion each, for a total of US$3.56 billion.

The issue had a demand of US$8.5 billion, or 2.4 times the amount finally allotted. The purchase offers came from investors from around the world, including the United States, Europe, Latin America, and Dominican investors.

“The high demand received in this transaction demonstrates the confidence of investors and the robustness of our economy, even in times of uncertainty in international markets,” said Hacienda Minister Jochi Vicente.

María José Martínez, Deputy Minister of Public Credit, highlighted the Dominican Government’s firm commitment to proactive management of the public debt, through operations that maintain its sustainability and, in turn, secure the external resources needed to finance the 2022 National Budget.

The institutions that served as structuring banks for the transaction were Citigroup Global Markets and J.P. Morgan Securities.

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Presidency

17 February 2022