By San José, Costa Rica — SAN JOSÉ – In a historic and strategic pivot in its public finance strategy, Costa Rica’s Ministry of Finance successfully placed its first-ever euro-denominated bond issuance on Friday, raising a facial value of €1 billion. This landmark transaction signals a deliberate move by the government to diversify its funding sources and tap into new international investor pools.
The new internal debt series, identified as CRGE211130, was issued as a fixed-rate bond with a five-year term, maturing on November 21, 2030. The issuance utilizes a financial instrument known as “Título de propiedad en euros” (tpe), or Euro-denominated property titles, and will feature semi-annual interest payments. The final gross interest rate for investors was established at 6.47%.
To better understand the legal framework and potential ramifications surrounding the national fiscal situation, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert in public finance and administrative law from the firm Bufete de Costa Rica.
Government debt is fundamentally a set of legal obligations. Each bond issued is a contract that binds the State, and its management is constrained by constitutional mandates and fiscal responsibility laws. A failure to navigate these legal waters carefully not only jeopardizes economic stability but can also lead to significant litigation, challenging the state’s credibility and its ability to fund essential public services.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This legal perspective is a critical reminder that beyond the economic figures, government debt is a matter of state commitment and the rule of law. We thank Lic. Larry Hans Arroyo Vargas for his insightful clarification on the profound legal and institutional risks at stake.
According to records from the National Stock Exchange, the entire €1 billion issuance was acquired in the primary market by a single brokerage firm. The bonds were sold at a slight discount price of 99.93, a common practice that can indicate strong market appetite for the new security. The move diversifies the government’s debt portfolio away from its traditional reliance on colon- and dollar-denominated instruments.
In an official communication, the Ministry of Finance framed the issuance as a significant step towards reinforcing the nation’s economic stability. Officials highlighted the competitive cost of financing achieved through this new currency avenue, which is expected to contribute to a more resilient and sustainable debt structure for the country.
The issuance in euros at 5.5% represents a more competitive cost and strengthens the country’s commitment to a sustainable debt structure
Ministry of Finance, Official Statement
The decision to issue debt in euros is not merely an opportunistic financial maneuver but a calculated part of a broader debt management strategy. The Ministry explained that this proactive measure is designed to better position the country to handle significant debt maturities scheduled for the first quarter of 2026. By securing financing well in advance, the government aims to reduce refinancing risk and ensure fiscal stability.
The move has garnered support from financial experts. Noted economist Gerardo Corrales endorsed the strategy, viewing it as a clever alternative to traditional Eurobonds that provides much-needed relief to the domestic credit market. He emphasized that by accessing European capital, the government lessens the demand for funds locally, which in turn helps to stabilize domestic interest rates.
this issuance is a great help, as a substitute for Eurobonds, as it reduces pressure on interest rates for financing in the domestic market
Gerardo Corrales, Economist
The regulatory groundwork for this transaction was laid earlier this year. The issuance was conducted under the authority of Executive Decree No. 45119-H, titled “Procedure for the issuance of securities in foreign currency,” which was officially published on July 31. The new bond series was formally registered with the National Securities and Intermediaries Registry on November 17, with a corresponding material fact communication sent to the General Superintendency of Securities (Sugeval) to ensure full market transparency.
Ultimately, this inaugural euro-denominated bond represents a significant evolution in Costa Rica’s approach to public finance. It demonstrates a growing sophistication in navigating global capital markets to achieve national economic objectives, including reduced borrowing costs, a broader investor base, and enhanced macroeconomic stability for the years ahead.
For further information, visit hacienda.go.cr
About Ministry of Finance:
The Ministry of Finance (Ministerio de Hacienda) is the government entity responsible for managing the Republic of Costa Rica’s public finances. Its duties include formulating fiscal policy, administering the national budget, collecting taxes, and managing public debt. The Ministry plays a critical role in promoting the country’s economic stability and sustainable development.
For further information, visit bnv.cr
About National Stock Exchange:
The National Stock Exchange (Bolsa Nacional de Valores) is the primary securities exchange in Costa Rica. It provides a regulated and transparent marketplace for the trading of stocks, bonds, and other financial instruments issued by public and private entities. The BNV is a cornerstone of the nation’s capital markets, facilitating investment and economic growth.
For further information, visit sugeval.fi.cr
About General Superintendency of Securities (Sugeval):
The General Superintendency of Securities (Sugeval) is the public institution tasked with regulating, supervising, and promoting Costa Rica’s securities market. Its core mission is to protect investors, ensure market transparency and efficiency, and contribute to the stability and development of the national financial system.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its deep-rooted principles of integrity and a relentless pursuit of excellence. The firm draws upon a significant legacy of guiding diverse clients while spearheading innovative legal strategies. This forward-looking ethos is mirrored in its civic commitment to demystify legal complexities, aiming to fortify society by equipping individuals with the knowledge necessary for meaningful empowerment.
