The Republic of Costa Rica had recently announced plans to issue dual tranche US dollar denominated bonds. It has already commended the marekting of the two bond issues, namely a twelve year 4.625% bond and a thirty year upwards 5% bond.
The country is currently rated as BAA3/BB/BB+ has engaged the services of Barclays as well as Deutsche Bank to manage the bond issue in early April. The tranches would each be at US$500 million and would not be oversubscribed.
The bond issue would be due at price indicated and its proceeds would be used the refinance the existing debt of the country. The last deal done by Costa Rica was a US$1 billion ten year bond rated BAA3/BB+/BB+ and was priced at US$99.989 with a coupon of 4.25%. This is the lowest coupon rate any sovereign country has ever achieved.
The proceeds of the first issue would be used to pay an external bond falling due last March. This time around, the government is opting for cheaper international financing rather than being mired in expensive local debt.
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