Paraguay eyes up to US$740m bond in 2016

viernes 9 de octubre de 2015 11:52 GYT

By Davide Scigliuzzo

LIMA, Oct 9 (IFR) - Paraguay is looking to raise up to US$740m in the foreign bond markets next year amid hopes that a boost to its credit standing is on the cards, the country's finance minister told IFR.

The landlocked South American country, which printed its debut international bond only two years ago, is determined to become a regular issuer in the US dollar market as it reaps the benefits of an improving credit story.

Even as its main trading partner Brazil is marred in recession, Paraguay is expected to grow by 3.7% this year, according to government projections.

Even with the IMF's lower forecast of 3%, the country is still likely to enjoy one of the highest growth rates in South America this year.

The sovereign's credit standing has been bolstered by four rating upgrades over the last two years. Meanwhile the yield on its debut 2023s stands at 4.9% - just north of the 4.17% quoted on the 2024s issued by investment-grade Colombia (Baa2/BBB/BBB).

"Rates are performing relatively well. We are 100bp tighter than Brazil and we are very close to Colombia," Finance Minister Santiago Pena Palacios told IFR this week on the sidelines of the IMF meetings in Lima.

"I think this is giving rating agencies something to think about."

Standard & Poor's and Fitch, which both rate Paraguay BB, still have to catch up with Moody's, which has the sovereign just one notch below investment grade at Ba1.   Continuación...