Deutsche Bank, HSBC win Costa Rica mandate for new bond: sources

miércoles 11 de febrero de 2015 13:46 GYT

By Davide Scigliuzzo

NEW YORK, Feb 11 (IFR) - Costa Rica has chosen Deutsche Bank and HSBC as lead managers on an up to US$1bn international bond sale that could take place as early as this month, market sources told IFR on Wednesday.

The government, expected to formally announce the mandate this week, made its selection from a short-list of six that also included Citigroup, Bank of America, JP Morgan and Barclays.

The idea is to be ready for any windows of issuance opportunity in the coming months, Juan Carlos Quiros Solano, the country's head of public credit, said this week.

The government has been authorized to raise between US$500m and US$1bn and is expected to decide on terms now that it has picked the banks.

Costa Rica was last in the market in April 2014, when it priced a US$1bn 2044 at par to yield 7%, or 339.5bp over US Treasuries, through leads Bank of America Merrill Lynch and Deutsche Bank.

At the time it still clung to one investment-grade rating - a Baa3 from Moody's - with both S&P and Fitch already rating it BB and BB+, respectively.

Since then, however, Moody's has demoted Costa Rica to Ba1, citing the failure to pass reforms that would lower deficits and ease its debt burden.

In January, Fitch revised its outlook on the BB+ rating to negative, pointing to slower economic growth and worsening debt dynamics.   Continuación...