Bolivia

Bolivia-headquartered Fonplata raises Sfr150m shortly after upgrade from S&P

South American supra is hitting its operational and lending targets

Fonplata, the South American supranational development bank, raised Sfr200m ($222m) of 5.5-year bonds in the Swiss franc market on Wednesday, increasing the size of the deal from an initially planned Sfr150m.

International investors have remained sanguine about the chances of a restructuring of Bolivia’s sovereign bonds even after the finance minister said the recently elected government was seeking payment relief on some external debt.

Bolivia’s dollar bonds traded lower for a second consecutive day on Tuesday as left-wing former finance minister Luis Arce looks set to assume the presidency. However, some argue that Arce is the best candidate for market stability, at least in the short term.

Bolivia will be forced to abandon plans to raise crucial funding in bond markets, the country’s public credit head has told GlobalCapital, after its Congress passed a bill that requires the government to seek approval from the legislative branch on the terms of the issue, amid a tense political climate.

Moody´s slashed Bolivia’s credit rating from Ba3 to B1 and placed its outlook on negative as it warned of a “material erosion” of the landlocked country’s fiscal and foreign exchange reserve buffers in recent years.

Standard & Poor’s on Monday became the third rating agency to react to political uncertainty in Bolivia, by putting its BB- rating on negative outlook. Yet its bond prices have begun to recover.

Bolivia-headquartered multilateral lender Fonplata sold its first ever bond on Monday, raising Sfr150m ($150m) of five year money from Swiss investors.

Expectations that a bond that already looked expensive will be become even more so helped Bolivia’s new 10 year trade well on the break after coming close to comps on Monday.

Latin America bond investors said that hopes of Bolivia’s new bonds receiving strong support from local buyers allowed the sovereign to print a new deal well inside better rated credits on Monday.

Bolivia’s budget for 2016 includes a $1bn bond issue to finance the construction of hospitals, finance minister Luis Arce said at a press conference in the capital, La Paz.