Guatemala Returns to Global Market With $700 Million in Bonds

After a three-year drought, Guatemala offered $700 million in bonds to help refinance debt and fund a budget deficit.

The 10-year notes sold to yield 4.6 percent, the lowest in the nation’s history, Finance Minister Julio Hector Estrada told reporters in Guatemala City. Demand for the bonds totaled $3 billion, Estrada said.

“There is high appetite for Guatemala debt, it’s a very low-maintenance, well-managed macro story,” said Sean Newman, a money manager at Atlanta-based Invesco Ltd. “Risks are fairly muted.”’

Consortium - Legal (Guatemala) acted as Local Counsel for the Sole Lead Manager and Bookrunner of the Notes issued by the Republic of Guatemala in the Luxembourg Stock Exchange. 

The Republic will use the proceeds from the sale of the Notes to pay interest and principal on its outstanding debt obligations and the remainder to finance social and investment programs and capital expenditures.

Consortium advised through partner Partner Alvaro Rodrigo Castellanos Howell, Senior Associate Alejos River, and Associates Fernando Beltranena Granai and José Gabriel Marin Luna.

Shearman & Sterling LLP acted as International Counsel to the Sole Lead Manager and Bookrunner through Manuel A. Orillac.

Simpson Thacher & Barlett acted as International Counsel for the Republic through Jaime Mercado.

Cuestas PPQ acted as local counsel to the Republic through Rodrigo Quevedo.

In house Lawyers:

Nancy Keenan (Bank of America Merril Lynch).

Guatemala’s economy will expand 4 percent this year, according to the International Monetary Fund, while Latin America and the Caribbean as a whole are poised to contract. The fuel-importing nation is benefiting from lower oil prices, while Guatemalans living abroad are sending home more money in remittances as the U.S. recovers. Guatemala is seeking to boost tax revenue and restore faith in the government after the president, vice-president and central bank chief were all jailed on corruption charges last year, President Jimmy Morales said at Bloomberg headquarters in New York earlier this month.