Uruguay considers bonds to fund coronavirus relief

Uruguay considers bonds to fund coronavirus relief

Bonds Debt Capital Markets Corporate & Sovereign Strategy Economy & Policy Fixed Income Loans Coronavirus Uruguay

Editor's note: LatinFinance is making some of its most important coronavirus-related material available to all readers. Visit our coronavirus section for all our coverage and sign up to receive the Daily Brief newsletter in your inbox every morning.

Uruguay is considering selling bonds on international markets if the conditions are right, even as it lands new financing from multilateral lenders to get through the COVID-19 pandemic. 

"The government will continue to monitor the evolution of the external market, looking for a cost-efficient window of opportunity," the Public Debt Coordination Committee said late Tuesday in a statement after its latest monthly meeting. 

The committee, made up of representatives of the central bank and the Economy Ministry, said it is not in a hurry to go to the market, saying that the sovereign has built up enough "financing flexibility" with precautionary lines of credit to wait for the best conditions.

Those conditions could come soon, however. "The market is on firmer footing today," Economy Minister Azucena Arbeleche said in an interview with El País newspaper published on Sunday. "Some emerging markets have entered the market. We will monitor the situation and not rule out any financing instrument."

Last month, Uruguay signed a three-year memorandum of understanding with the Japan Bank for International Cooperation (JBIC) to work together on the sale of yen-denominated bonds.

Uruguay has enough liquidity to take its time to tap the markets, Arbeleche added.

Multilateral lenders have provided $800 million in credit at low rates, according to the Public Debt Coordination Committee.

On Tuesday, Latin American development bank CAF awarded a $50 million loan to Uruguay to fight the COVID-19 pandemic and mitigate its impacts on the economy and public health system.

The country also became a member this week of the Asian Infrastructure Investment Bank (AIIB), another source of multilateral financing for the future, according to a statement from the Economy Ministry.