The country is preparing its first international issue since 2004, aiming to reduce the fiscal deficit which has already reached 5% of GDP.
In an interview with Bloomberg, Vice President Luis Liberman said they don't want to saturate the local market, and that the President will not reintroduce a new version of the tax package rejected by the Constitutional Court in April.
If approved, the borrowing plan would authorize the Executive to issue up to $4 billion in international bonds over the next 10 years, with a maximum of $1 billion per year.
The annual amount cannot exceed $1 billion in order to avoid the placement of debt in a single issue.
The Economic Affairs Committee of the Legislative Assembly gave its approval to a motion that seeks to double the maximum amount of foreign bonds that the Government may sell, going from $2 billion to $4 billion, said Rep. Patricia Perez, president of the commission.
The Guatemalan company Central America Beverage (Cabcorp) will release bonds worth $150 million on the U.S. market next week.
For the second time the company is to issues securities in international capital markets. The first time the issuance, rated BB, Ba2 and BB + by the rating agencies Standards & Poors (S & P), Moody's Investors and Fitch Ratings respectively, was acquired by Citigroup Global Market Inc.
The presidents of various Guatemalan unions have asked the Monetary Board not to authorize the issuance sought by the state.
According to representatives of the Chambers of Agriculture, Industry and Commerce associated with the Committee of Commercial, Industrial and Financial Associations (Cacif), this action "will affect the macroeconomy and increase the fiscal deficit."
The Monetary Board (JM) authorized the issuance of $ 210 million in treasury bonds by the Ministry of Finance.
If approved by Congress, the Government's deficit this year would reach 3.4% of GDP.
Elperiodico.com.gt reports, "Julio Suarez, vice president of Banguat, announced that JM endorsed his opinion of an increase in public debt, although representatives of the private banking and corporate sectors opposed it."
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