Wall Street investors attracted by DR bonds

Dominican Republic bonds are popular among Wall Street investors. Major firms such as JP Morgan Chase & Co., Banco Bilbao Vizcaya Argenta and Banco Santander recommend these to their clients as a result of the country’s economic recovery compared to its peers.

The increasing interest by international investors coincides with a recent upgrade by the global credit rating agency, Standard and Poor’s. Standard and Poor’s upgraded the Dominican rating from BB- to BB in December 2022.

Hacienda Minister Jochi Vicente tweeted at the time that this was the first upgrade since 2015. He said the new rating improves the investment climate that translates into more foreign companies showing an interest in investing in the country and creating formal jobs here. He said this also reduces the interest rate for government bond placements and can stimulate a decline in interest rates on loans.

According to a Bloomberg report, Dominican sovereign debt instruments are becoming a favorite among Wall Street investors, as other Latin American debt instruments begin to fade.

“Credits like those of the Dominican Republic offer stability and resilience in the face of uncertainty in broader external markets,” said Siobhan Morden, managing director of fixed income strategy for Latin America at Santander, quoted by the agency, who recommends the country’s dollar-denominated sovereign bonds.

JP Morgan strategists reported that local currency debt offers a good opportunity to take advantage of the Dominican peso, which has strengthened 2% in the last month, the best performance among Latin American currencies behind Mexico.

“Investment should continue to be an important driver of growth, supported by relatively stable and business-friendly policies,” strategists Gisela Brant and Steven Palacio wrote in a note.

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13 March 2023