New York, London – The Paraguayan government has embarked on a series of investor meetings in New York and London to explore the issuance of new sovereign bonds denominated in US dollars and/or Guarani. Led by Finance Minister Carlos Fernández Valdovinos and Central Bank Governor Carlos Carvallo Spalding, the initiative aims to bolster the country's financial position and leverage its recent credit rating upgrade.
For this significant undertaking, the government has appointed two prominent financial institutions, Citigroup and Itaú BBA, as joint bookrunners. With extensive experience in international capital markets, these entities will play a crucial role in organizing investor meetings and facilitating the bond issuance process.
In addition to securing new funds, Paraguay has announced a cash tender offer for outstanding bonds maturing in 2026 and 2027. This strategic move seeks to optimize the country's debt structure and reduce financial costs in the long run.
This bond issuance marks Paraguay's first foray into the market since achieving an investment-grade rating from Moody's. The credit rating upgrade has generated significant optimism in international markets, reflected in the strong demand for Paraguayan bonds in previous issuances.
The Paraguayan government has received legislative approval to issue bonds totaling USD 1,288.5 million. This amount comprises USD 574 million authorized by the Debt Management Law for public debt management and USD 714.5 million approved by the National Budget Law to cover the fiscal deficit, equivalent to 1.9% of GDP.
In addition to dollar-denominated bonds, the Ministry of Finance has expressed interest in issuing a second bond in the local currency, Guarani. This measure aims to diversify the country's funding sources and strengthen the domestic capital market.
Past Paraguayan bond issuances have been met with strong investor demand. In 2024, demand for Guarani-denominated bonds exceeded supply by 2.5 times, while demand for dollar-denominated bonds reached eight times the supply. This data demonstrates the high level of interest in Paraguayan debt among market participants.
Finance Ministry officials are confident that this new bond issuance will be successful, buoyed by the country's robust economic situation, credit rating upgrade, and support from international investors. The funds raised through this initiative will enable the Paraguayan government to finance development projects, strengthen infrastructure, and consolidate the country's macroeconomic stability.
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