Download Sovereign Bonds bring investment for the economic development in

NEWSLETTER
Sovereign Bonds bring investment for
the economic development in Bolivia
The USD 500 millions colected through the
sales of sovereign Bonds will be invested
in the construction of communication
roads, bridges and other development
projects. For this investment the Bolivian
state will pay n annual interest rate of 4,875%
Bolivia ‘s debut at the international financial market
of New York , selling after just couple of hours
USD500 millions in sovereign bonds, operation
that placed Bolivia
in the world map for
investment and opened the door for new
capitals for the private and public productive
sector.
29 deOctober
octubre
2012 - Nº79
29th,de
2012
¿W hat is a sovereign bond?, ¿what is the
stock market ?, ¿why is the Government
getting a USD 500 million debt? You will
find the answers to these questions and
other ones in this issue of Plural
Economy, with easy concepts and easy to
learn. And if you need more information you can
visit the Ministry of Economy and Public
Finances
web
site
(www.economiayfi
nanzas.gob. bo).
www.economiayfinanzas.gob.bo
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NEWSLETTER
What are sovereign bonds?
¿Qué son los bonos soberanos?
They are a debt instrument that the State offers to the
stock
markets to attract
investment. In this
case
Bolivia
Son
un instrumento
de endeudamiento
que
el Estado
sovereignfinanciero
bonds forinternacional
USD 500 million
a 10
ofertaissued
en el mercado
paraforcaptar
term.
inversiones. En este caso, Bolivia emitió bonosyears
soberanos
por 500 millones de dólares a 10 años plazo.
Is the emission of Sovereign Bonds the same as borrowing
¿La emisión de bonos soberanos es igual a prestarse
money?
dinero?
4.875%
Interest
Rate
Yes. The Bolivian State will pay to investors an annual interest rate
Sí. El Estado
pagará
a los10
inversionistas
ungive
interés
of 4.875%
for 10boliviano
years. So
that every
years should
backanual
to
4,875%,the
por
el lapso
10payed
años. for
O sea
que en una
década
thede
investors
money
thatde
they
the purchase
of the
deberásovereign
devolver bonds.
a los inversionistas
el dinero
quereputation
pagaron of
en la
Bolivian
The only guarantee
is the
bonos soberanos bolivianos. La única garantía es la
thecompra
Boliviande
economy.
reputación de la economía boliviana
¿Why does the Government borrow Money through the issuing of sovereign bonds ?
1- The National Government place Bolivia overseas as a country with successful
economic policy and state income redistribution through conditionated social bonds for the
most vulnerable sectors (children, pregnant women and elderly).
2- Diversify founding sources for the public sector with international funding, however the
country does not need at the moment foreign credits, because its economic indicators show that
from 2006 there has been fiscal surplus, sustained Gross Domestic Product (GDP) growth,
increment in international reserves, austerity in the public spending, reduction of the external
debt and extreme poverty, and improvement in other economic indicators. Additionally we take
advantage of the insuperable current financial conditions.
3- The successful emission of sovereign bonds shows that Bolivia is a suitable country to
receive foreign investment either for the public sector as well as the private, with favorable
conditions for the development of a stable economy, with growth and multiple possibilities in
sectors such as mining, hydrocarbons, manufacturing, transport, communications and other
areas.
¿Therefore with the emission of Sovereign Bonds
do we promote Bolivia’s image?
Yes. We promote the good health of our economy, its solvency and
payment capacity of external debts.
October
29th, 2012
29 de octubre
de 2012 - Nº79
www.economiayfinanzas.gob.bo
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NEWSLETTER
How many investors did want to buy sovereign bonds in New
York?
¿Cuántos inversionistas querían comprar los bonos
OVER USD
4.200
MILLIONS IN
DEMAND
soberanos bolivianos en Nueva York?
The sovereign Bonds offer was successful, because 267 investors
wanted
to invest
in Bolivia.
Those fue
2676exitosa,
investors
offered267
to give
La oferta
de bonos
soberanos
porque
credits
to the country
overen
USD
4.200
millions,
it means eight
inversionistas
querían for
i nvertir
Bolivia.
Esos
267 inversionistas
ofrecieron
dar créditos
país
por
más
de
4.200
millones
de
times
more than
theDpé
offeral
(USD
500
millions)
placed
by Bolivia
de
de 100 años, Bolvi
itió at
o
b
n
n
m
e
d
~
n
a
n
c
i
o
i
t
a
c
i
stock markets.
dólares, es decir, ocho veces más de la oferta (500 millones de
dólares) puesta porLa
Bolivia
enfue
el mercado
externo.
emisón
realizadafinanciero
el lunes 22
de oct
And the 4.875% interest is high or low?
¿Y el interés deLa4,875%
es alto
bajo?
tasa de interés
ograda
fu
It is Low. Other countries at their debut issuing sovereign bonds, payed more. For example Peru
payed
9.125%
of interests,
Chile 6.875%;
Rica 8%de
and
Egyptpagaron
payed 8.750%.
Es bajo.
Otros
países, cuando
debutanCosta
n la emisión
bonos,
más. Por ejemplo,
muy por debajo del promedo de países con similar cali~cación de riesgo
Perú pagó 9,125% de interés; Chile 6,875% de interés; Costa Rica pagó 8% de interés; Egipto
incluyendo Chile, que en su debut tuvo una cali~cación superior:
INTEREST
AT THE
La tasaRATE
de interés
de EMISSION
la emisiónDEBUT
debut
BB+
BBB
BB-
BB-
B-
9,375% 9,50%
A
8,00%
6,875%
,875% 6,75%
Promedio
7,96%
4,875%
Bolivia
Vietnam Indonesia
Perú
Egipto
El
Salvador
Costa
Rica
Ecuador
Rep.
Dominicana
Chile
Fuente: Bloomberg
Is Bolivia going to offer sovereign bonds again?
mía exitosa, rati~cando los resultads
¿Bolivia volverá a ofertar bonos soberanos?
The
Government
will assess
it is necessary
not toa offer
again
El Gobierno
evaluará
si s ifnecesario
o no or
volver
ofrecer
al
inistórico
the stock
markets
sovereign
bonds.
The
relevant
point
is
that
we
también estabec e una nueva fuente de
to quehave
pemitirá
encrar las in
inversiones
Gobierno
already
the instrument
operation. del
Public
companies
can
mercado
financiero
bonos soberanos.
Lo
importante
es que
onsolidar
el crmiento
y socilfrom
sostenido
que
also
place debt,
it means,cnómico
borrow money
foreign investors.
ya se tiene e l i nstrum e nt o operando. L a s empresas públicas
Private
do el país
businesses
en los útims
have años,
the same
a través
possibility
de la industialización.
to fund their
también pueden col ocar deuda, es decir, presta r se dinero de
productive
activities.
financiadores del exterior. Los empresarios privados tienen la
de cumplimiento
Economía y Fianzas Pblics
se encargó de la
misma posibilidad
financiar
sus actividades
productivas.
de lapara
Ley 211
del Presupuesto
General
del
October
29th.de
2012
29
de octubre
2012 - Nº79
www.economiayfinanzas.gob.bo
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