Franco Uccelli, of Bear Stearns reports that the Dominican government announced last night the results of its bond exchange offer “showing a surprisingly high rate of investor participation”. The final outcome, as reported by Uccelli is: “The aggregate principal of existing bonds tendered totaled US$1.03 billion, equivalent to approximately 93.6% of the total bonds outstanding. Of the US$500 million in 2006 bonds outstanding, some US$456 million were tendered, representing approximately 91.2% of the total. Meanwhile, of the US$600 million in 2013 bonds outstanding, US$574 million, equivalent to 95.7% of the total, were tendered.” Uccelli explains that the exchange offer expired on Wednesday, 4 May, and settlement is scheduled for Wednesday, 11 May 2005.
This means that on Wednesday, the DR is due to deliver US$456 million in new 9.50% amortizing bonds due in 2011 and US$574 million in new 9.04% amortizing bonds due 2018 to participating investors.
He concludes: “Completion of the exchange should put an end to a long and tedious process during which the Dominican government successfully justified and executed a market-friendly bond exchange that should help the country emerge from its current liquidity jam and satisfy the comparability of treatment requirement imposed upon the Dominican Republic by the Paris Club in exchange for bilateral debt relief. All in all, good results and improved prospects for the Dominican Republic.”