March 7, 2018 |
The Dominican Republic’s decision in February to print a peso-denominated bond was a bold move, given market conditions. But it also exemplified a trend toward corporate and sovereign debt sales in local currencies that could pick up in 2018.
A month before the Dominican government issued a note for 40 billion pesos ($817 million), Chile sold a Euroclearable bond for €830 million ($1.03 billion), following other sovereign issuers that printed local currency bonds last year. Now more governments are expected to do the same, despite concerns about populism in elections around the region and rising interest rates, both of which could potentially dampen international investor enthusiasm.
Sovereign issuers are increasingly tapping global capital markets through local currency bonds. Corporate issuers are likely not far behind.