$1.5 billion in Eurobonds
to be issued next month

Issue of the balance of $3.5 billion due before the end of 2015

The Ministry of Finance (MoF) is preparing to issue a Eurobond on September 1 to cover the country’s debt service for the full year of 2015.

Parliament has approved the issuance of bonds worth $2.5 billion, although the amount due for this year is worth $3.5 billion. The MoF had already finalized the issuance of Eurobonds worth $2.2 in February and is working now on covering the remaining amount.

In 2014, the MoF submitted a draft law to enable the Government to issue bonds worth $4.4 billion. The purpose was to cover the debt duties for part of 2014 and the full year of 2015.

“We have arranged all measures related to the Public Debt Management, the General Directorate and the UNDP consultancy team,” said Minister Ali Hassan Khalil. “We have also prepared all facts and are only waiting to be mandated by the Council of Ministers to start the process,” he said.

“The new Eurobond issuance may be as one category or several, depending on the laws used for the process, the bond’s maturity date and market conditions in terms of investors’ appetite and interest rates,” according to a statement made today by a source at the MoF. “The MoF will also have to take into consideration the amortization schedule of its payment duties,” the source said.

The $2.2 Eurobond issuance in February was divided into two categories. The first of $800 million, with a maturity date of 2025 and an average yield of 6.2 percent. The second of $1.4 billion, with a maturity date of 2030 and an average yield of 6.65 percent. “The maturity of the new issuance has not been set yet, since it will depend on the laws used for issuance,” the source said. The maximum maturity date of bonds is 30 years, according to the 2014 law that enables the Government to issue bonds. “The MoF may not rely only on the 2014 issuance law and is studying several options,” the source said.

The MoF has previously issued bonds according to laws issued in 1998, 2001, 2012, and 2014. It has also benefited from laws to perform a bond swap and issuance, in coordination and consultancy with the Consultancy and Legalization Authority at the Ministry of Justice, according to Khalil.

The State has another debt due for payment at the beginning of 2016. However, a law is needed to allow the issuance of Eurobonds covering it. “We are committed to paying all of the country’s duties,” said Khalil. “We are ready to opt for all choices so that the country doesn’t lose its credibility and fall into default with any international institution,” he said.