A glimpse up the deal pipeline
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A glimpse up the deal pipeline

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Central America has rarely commanded the attention of international investment bankers. The few decent-size deals to have come out of the region in recent years have been sovereign borrowings.

The most recent sovereign Eurobond from the region was Costa Rica's $300 million 10-year deal last month, led by Credit Suisse First Boston. This issue, priced at 412.5 basis points over treasuries, forms part of a strategy of reducing the country's expensive internal debt (which accounts for 34% of GDP, according to the finance ministry) with international borrowing (which now accounts for 17% of GDP). However, the government would need to seek authorization from Congress for any additional borrowing.

El Salvador has been planning to launch its first international bond for some time. However, the mandate to lead this deal has already been awarded to Citibank. "We began to plan our debut Eurobond seven years ago," says Rafael Barraza, vice-president of El Salvador's central bank. "We were all ready to go in 1997 and then we had to postpone it after Thailand devalued.

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