El Salvador’s Minister of Finance, Alejandro Zelaya, has stated that the regional debt market has the potential to become a financing channel to drive development projects.
In April, the Government of El Salvador and the Central American Bank for Economic Integration (BCIE) announced the first issuance of the Regional Debt Market, a $75 million bond that will be guaranteed by the multilateral institution.
The unprecedented issuance in the region was highlighted by Minister of Finance Alejandro Zelaya during his participation in the International Forum of Issuers of the Americas’ Stock Markets (FIMVA), which is taking place in the country from June 14 to 15.
“We recently announced, together with the BCIE, a guaranteed issuance of $75 million to inaugurate the first issuance of the Regional Debt Market. This will undoubtedly encourage sovereign issuers to make some assets available in the regional market and will also energize not only the markets in El Salvador but also throughout Latin America,” stated the minister.
Zelaya believes that this initiative has the potential to bring dynamism to the stock market environment in the region, which is valued at around $120 billion annually. It also aims to become an accessible financing option for Central America and BCIE member countries.
“Central America alone represents an annual market of around $120 billion, which is currently not fully utilized. From our perspective, we believe it has great potential to provide financing to the region,” emphasized Zelaya.
The official further reinforced that stock markets can play a crucial role in the development of countries in Latin America, where obtaining financing is still difficult.
“Stock exchanges not only bring economic dynamism to our countries but also help finance projects that cannot be funded by the government or other sectors of society,” he stated.
SHORT-TERM DEBT MANAGEMENT
The Minister of Finance also informed the debt issuers and restructurers present at FIMVA that the government has requested approval from the Legislative Assembly to implement a short-term debt management strategy.
“We will have operations amounting to approximately $2 billion this year, which will undoubtedly provide new investment opportunities to the capital markets in the region. We hope that this can be one of the operations that we can also regionalize, allowing other countries to have the opportunity to invest in our assets,” expressed Zelaya.
FIMVA is the largest stock market event in Latin America and is organized by the Association of Capital Markets of the Americas (AMERCA) in conjunction with the El Salvador Stock Exchange.