March 15, 2013 / 5:51 PM / 5 years ago

Paraguay central bank eyes $300 mln global note issue by April-IFR

PANAMA CITY, March 15 (Reuters) - Paraguay plans to issue a 10-year $300 million global depository note as soon as April to capitalize on the success of its recent 10-year bond issue, Central Bank President Jorge Corvalan told Thomson Reuters service IFR on Friday.

Paraguay sold $500 million in 10-year international bonds in January, capturing a yield on the low side of expectations for what the government hailed as the most successful global credit markets debut in history.

“When we had our roadshow for the dollar bond, we kept being asked by investors how they could get into the local market,” Corvalan said on the sidelines of Inter-American Development Bank meetings in Panama.

“Although we have very open capital markets, the complicated part is the custody issues, for which the GDN will be used to bridge the gap.”

GDNs give foreigners access to local currency debt markets without necessarily setting up accounts in the country of origin. The transactions are not governed by local laws.

Local currency guarani debt pays yields twice as high as the debut global bond at around 9 percent.

Paraguay, one of South America’s poorest nations, is expecting a strong economic rebound this year and Corvalan said he expects growth of 10 percent. The country is keen to tap investor appetite for relatively risky but higher-yielding debt from smaller emerging market issuers.

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