Costa Rica Eyes Dollar Issue

Costa Rica plans to seek approval for an international bond this year, according to the H1 2011 borrowing strategy announced by its treasury. The decision is not a surprise given the market’s expectations for a budget shortfall. Nomura expects a 6-year dollar bond for $250m. “Even when authorities plan on requesting the needed authorization to Congress as soon as next month, its first stop is the finance committee, which right now is exclusively focused on the discussion of the fiscal reform plan,” Nomura says, spotting a Q4 deal. It forecasts a -0.6% fiscal balance for 2011. Facing CRC300bn ($600m) in maturities in the first half of 2012, the sovereign also plans to issue a 10-year local bond to extend its local currency curve. Baa3/BB Costa Rica’s last cross-border bond was a $250m 10-year in 2004, according to Dealogic.