Sometimes emerging-market sovereigns retire higher-yielding Brady bonds when they issue lower-yielding globals. Sometimes, they issue higher-yielding global bonds even when they have access to lower-cost funding from the official sector in an attempt to diversify their funding base. Never, until now, has a country retired higher-yielding official-sector debt as part of a lower-yielding bond issue.
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Finance minister Eyzaguirre: a borrowing strategy tied into dollar earnings from copper |
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The whole point of funding from multilateral development banks, after all, is that it is extended at concessionary rates in return for preferred-creditor status and the country’s accession to an IMF plan.
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