Paraguay Sells $1 Billion of Bonds in Return to Overseas MarketJulia Leite
Paraguay sold $1 billion of dollar bonds today, tapping overseas markets for the first time since a rating upgrade in June.
The South American nation issued 30-year dollar bonds to yield 6.1 percent, compared with an average yield of 6.29 percent for similar maturity notes from countries that share Paraguay’s BB rating from Standard & Poor’s, according to data compiled by Bloomberg. Bank of America Merrill Lynch and JPMorgan Chase & Co. were the managers of the sale.
The country will use the proceeds for infrastructure and energy projects, according to a person familiar with the matter, who asked not to be identified because the information is private. President Horacio Cartes said he would seek to increase development and agriculture investments after he took office last year.
Paraguay’s credit rating was raised to two steps below investment grade in June by S&P, which said measures the government is taking to bolster investment will fuel growth. The rating, in line with Croatia, Hungary and Costa Rica, has a stable outlook.
Paraguay sold $500 million of 10-year bonds to yield 4.625 percent in January 2013, its debut in the international bond market. The yield has since fallen to 4.46 percent.