Andean Group - March 2017 (ISSN 1741-4466)

New bond issue: On 13 March, the Movimiento al Socialismo (MAS) government led by President Evo Morales announced a US$1bn bond issue – the first in three years. According to the international media, the new bond, which has a 10-year average life, amortizes in three equal parts in 2026, 2027, and 2028. Bank of America Merrill Lynch and JP Morgan acted as leads on the deal.

Three days later Finance Minister Luis Arce said that, with the latest bond issue, Bolivia’s foreign debt would reach US$8.23bn – representing 22% of GDP. He said that in 2016 foreign debt represented around 20%-21% of GDP, and that the bonds would be used to finance the construction of third and fourth level hospitals. Of the US$1bn, 60% will be used to finance the construction of fourth level hospitals in the departments of La Paz, Cochabamba, Santa Cruz, and Tarija while the remainder would finance the construction of third level hospitals in Cochabamba, Santa Cruz, Beni, Pando, and Chuquisaca. The previous month Arce said that he expects the Bolivian economy to grow 4.7% this year, but he estimates that the fiscal deficit will remain at around 6.5%.