Guatemala tapped global markets for the first time in nearly a year in a bid to take advantage of investor sentiment after a pair of recent credit-rating upgrades.
The Central American nation priced $1 billion in notes due in 2036 with yield of 6.6%, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. Earlier price talk described a potential yield in the very-high 6% range, the person said.
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The new bonds will have three equal amortizations in 2034, 2035 and 2036, the people said. Santander was the sole bookrunner for the deal.
The debt offering comes in the wake of twin credit-rating upgrades by S&P Ratings and Fitch Ratings. They both boosted Guatemala’s score in recent months to BB, two levels below investment grade. Moody’s Investors Service rates the nation at Ba1, with a stable outlook.
“Cautious fiscal and monetary policies have stabilized Guatemala’s economy and should support continued GDP growth,” S&P analysts including Omar De la Torre wrote in an April statement.
Guatemala last issued debt in global markets in August, when it priced a $500 million seven-year note at a yield of 5.45%. The 2029 bonds edged higher on Tuesday to about 96 cents on the US dollar, according to indicative price data collected by Bloomberg.
The nation is joining a relatively small cohort of Latin American bondsellers this year as major central banks keep borrowing costs high. Before Guatemala’s deal, countries in the region have sold just $15 billion of hard-currency debt so far in 2023, the lowest amount for the same period of any year since 2012, according to data compiled by Bloomberg.
--With assistance from Christopher DeReza and Brian Smith.
(Updates with pricing details throughout. An earlier version of this story corrected Moody’s credit rating in fourth paragraph.)
