Paraguay debt: Mass appeal

Sep 25, 2013

The sovereign is hoping to lead the way in courting capital to Paraguay. Boosting foreign investment will be key to its ambitious infrastructure plan

By Jason Mitchell

In January, one of Latin America’s smallest, poorest and least known economies notched up a triumph in its bid for foreign investor recognition.

Paraguay, a landlocked nation of just nearly seven million, successfully issued a $500 million, 10-year bond, the sovereign’s cross-border debut. The deal, underwritten by Citi and Bank of America Merrill Lynch, was more than 11 times subscribed and offered a yield of just 4.625% — the bottom end of pricing guidance.

The bond issue served its purpose, says Roland Holst, acting governor of the central bank. Its main objective was "to put Paraguay on the financial map," he says.

"Before it was issued, the country was completely unknown. Now, a lot more investors have become interested in Paraguay. We have had Asian and American investors visit us for the first time. We have managed to raise the country’s financial profile and a lot...

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