LatinNews Daily Report - 23 October 2012

ECONOMY | Bolivia sells global bonds. On 22 October Bolivia returned to global credit markets for the first time since the 1920s after the government of President Evo Morales sold US$500m worth of ten-year bonds. According to reports in the international press, the bonds, which offered a yield of 4.875%, were oversubscribed, raising as much as US$1.5bn. The successful issuance reflects the confidence in the prudent macroeconomic policies adopted by Bolivia’s left-wing government and the level of investor confidence in the country despite recent nationalisations, such as the May take-over of an electricity transmission company, Transportadora de Electricidad (TDE) from Red Eléctrica Internacional SAU, a subsidiary of Spain’s Red Eléctrica Española (REE). With the Morales government boasting an average GDP growth rate of 4.7% since it took office in 2006 and international reserves of some US$13bn – currently half of GDP - Fitch Ratings was the latest international credit ratings agency to upgrade Bolivia at the start of the month, raising its long-term foreign currency rating one notch to BB-, or three steps below investment grade. This brought it in line with Standard & Poor's decision, announced in May, to upgrade Bolivia’s long-term sovereign credit rating to BB- from B+ and Moody's Investors Service's which upgraded government bond ratings to Ba3 from B1 in June.

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