IDB Invest Issues a Domestic Bond in Paraguay to Support Development Projects

Press Statement from IDB Invest 

IDB Invest issued its fifth bond denominated in Paraguayan guaranies, to finance private sector operations through Banco Atlas. The issued amount was 90 billion guaranies (approximately $12 million), with a 5-year tenor, and will support development projects in Paraguay.

This transaction will allow Banco Atlas to create a new program focused on promoting long-term projects in the agricultural and livestock sector, with the aim of financing or refinancing investments that promote productivity improvements in the sector. It will also provide greater access to medium and long-term financing for companies in the productive sector.

The objective of IDB Invest’s bond issuance program in Paraguay is to finance private sector projects in Paraguay that require local currency.

Orlando Ferreira, Chief Finance Officer of IDB Invest, said, “We are very proud to have been the first multilateral development bank to issue a local currency bond in Paraguay in 2018. Local capital markets solutions are a powerful tool and allow issuers to finance projects with longer tenors and in local currencies. We are committed to increasing access to local currency for our private sector clients to promote sustainable development.”  

Cadiem acted as dealer for this issuance. The strong demand was a result of a diversified investor base, reflected in orders that exceeded 2.12 times the amount offered. IDB Invest’s issuance was allocated to 12 investors, among private and public pension funds, public and private entities, insurance companies and mutual funds – demonstrating IDB Invest’s success in achieving its mission to develop local capital markets.

Additionally, the allocation to some of the investors will potentially promote the opportunity for secondary market trading, further strengthening local capital markets.

IDB Invest is offering more local currency options to its clients to help them mitigate currency and interest rate risks. Local currency allows private sector companies to focus on their operations rather than taking unnecessary market risk. This leads to better development outcomes, allowing companies to expand their activities, create more employment opportunities and increase productivity.

This operation contributes to two Sustainable Development Goals (SDG) of the United Nations Organization: Decent Work and Economic Growth (SDG 8), Reduced Inequalities (SDG 10).

Since 2016, IDB Invest has committed more than $1.7 billion in Paraguay, financing private sector activities that contribute to the country’s development in areas such as manufacturing, small and medium enterprises, agribusiness and financial markets.