Sovereign Issuer of the Year: Dominican Republic

Sovereign Issuer of the Year: Dominican Republic


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Days before the Dominican Republic approached the international bond markets in February 2018, global stock indices were roiling.

The Dow Jones Industrial Average plunged 1,175 points on Feb. 5, and the rout rippled across stock markets around the world as investors worried about inflation and nervously watched the bond market, where yields were creeping higher.

Three days later, with markets calmer, the Dominican Republic launched a dual-tranche offering that included a DOP40 billion ($817 million) 2023 local currency bond, marking its debut under the Euroclear format. It also launched a $1 billion, 30-year cross-border bond.

The local currency transaction was the first global local currency bond from a non-investment grade sovereign issuer in Latin America. The sale drew strong investor appetite, with the Dominican Republic printing the lowest coupon ever for a DOP-denominated bond.

Citi and JPMorgan, along with local firm Banreservas, started price talk in the mid-6% area on the 2048 dollar tranche, while the Euroclear note was set at the .95% area. Leads tightened the longer-dated bond to between 6.4% and 6.5% at guidance, while the five-year Euroclear lowered to the 8.9% area.

The deal also represented the lowest yield ever for a 30-year benchmark bond from the Dominican Republic.