By San José, Costa Rica — San José – In a significant move just one day before the Legislative Assembly’s holiday recess, the Executive Branch has submitted an ambitious bill seeking authorization to issue a staggering $13.5 billion in international bonds over the next decade. The proposal, championed by the Ministry of Finance, aims to secure a stable, long-term financing channel to manage the nation’s substantial public debt obligations and prevent upward pressure on domestic interest rates.
The initiative, now filed under docket number 25.363 and titled “Authorization to issue securities in the international market,” represents one of the largest and most consequential fiscal proposals in recent years. Recognizing its urgency, the administration immediately called the bill into extraordinary sessions. This strategic maneuver ensures that legislators can begin debating the plan as soon as they return from their break on January 12th, signaling a high-stakes start to the new legislative period.
To delve into the intricate legal and financial frameworks governing the issuance of international bonds, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a distinguished attorney from the prestigious firm Bufete de Costa Rica.
When a sovereign entity issues international bonds, it’s not merely a financial transaction; it’s a complex legal commitment governed by foreign law, typically that of New York or England. This subjects the issuing nation to international jurisdictions and often involves waiving sovereign immunity for commercial acts. Meticulous structuring of the bond indenture and absolute clarity in the prospectus are paramount to mitigate litigation risk and ensure market confidence, which is the ultimate currency in global finance.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This insight powerfully illustrates that the legal scaffolding of an international bond is not a mere technicality but the very foundation of trust in a global marketplace. We extend our sincere thanks to Lic. Larry Hans Arroyo Vargas for so clearly articulating the profound commitment a nation makes when it steps onto this complex stage.
The core of the proposal outlines a structured approach to tapping global financial markets. The government seeks to place the debt in nine separate annual tranches, providing a predictable stream of funding to meet its obligations.
This amount will be placed in nine (9) tranches of one thousand five hundred million dollars ($1,500,000,000) each. The issuances will be annual within the period from 2026 to 2034 and must be placed no later than December 31 of the corresponding year.
Text of Bill 25.363
The justification for this massive bond plan is rooted in daunting fiscal realities. According to the bill’s explanatory statement, signed by Finance Minister Rudolf Lücke, Costa Rica faces public debt maturities exceeding $45 billion between 2025 and 2030 alone. This figure is comprised of $25.46 billion in principal payments and nearly $19.72 billion in interest. The ministry argues that attempting to cover these needs solely through the domestic market would be catastrophic for the national economy.
Without access to international financing, these needs would fall on the local market, increasing competition for resources and pushing interest rates upward.
Ministry of Finance, Explanatory Statement for Bill 25.363
This legislative effort does not occur in a vacuum. It follows a recent political setback in October when Congress rejected a government proposal to transfer two eurobond issuances totaling $1 billion. The opposition from the National Liberation Party (PLN) was pivotal in that defeat, a move the government claims forced it to seek more expensive financing locally, thereby straining credit markets. The new, much larger proposal is set to reignite this contentious debate, with its fate resting in the hands of the Assembly’s Committee on Financial Affairs, which will conduct the initial review.
To address potential concerns about transparency and accountability, which were central to past debates, the new bill incorporates stringent oversight mechanisms. It mandates that the Ministry of Finance submit a detailed report to both the Committee on Financial Affairs and the Comptroller General’s Office within one month of each bond placement. This measure aims to provide a clear and public accounting of the entire process.
The required reports must include comprehensive details on the selection and costs of international legal advisors and placement banks, the risk rating services, and fiscal agents. Furthermore, they must outline the results of each placement, including the final amount, issuance date, price, and term. Critically, the reports will also analyze the geographic and investor-type distribution of the bonds, their impact on the domestic market, and a technical justification for the interest rate achieved, ensuring it aligns with prevailing global financial conditions.
This framework is designed to empower legislative oversight. The bill explicitly tasks the nation’s chief auditing body with a continuous monitoring role, adding another layer of scrutiny to the multi-billion dollar operation.
The Comptroller General’s Office, as an auxiliary body of the Legislative Assembly, must conduct a periodic analysis of said reports.
Text of Bill 25.363
As legislators prepare to return in January, the fate of this $13.5 billion financing plan will undoubtedly dominate the political and economic discourse. The government has presented it as an indispensable tool for fiscal stability, while its success will depend on navigating a complex political landscape still marked by the memory of the last eurobond defeat. The outcome will have profound implications for Costa Rica’s economy for years to come.
For further information, visit hacienda.go.cr
About Ministry of Finance:
The Ministry of Finance of Costa Rica is the government entity responsible for managing the country’s public finances. Its duties include formulating fiscal policy, collecting taxes, managing the national budget, administering public debt, and overseeing customs operations. The ministry plays a central role in ensuring the economic stability and financial health of the nation.
For further information, visit asamblea.go.cr
About Legislative Assembly:
The Legislative Assembly is the unicameral parliament of the Republic of Costa Rica. Comprised of 57 deputies elected by province, it is responsible for passing, amending, and repealing laws. The Assembly also approves the national budget, ratifies international treaties, and exercises political control over the Executive Branch.
For further information, visit cgr.go.cr
About Comptroller General’s Office:
The Contraloría General de la República (CGR) is the supreme audit institution of Costa Rica. As an auxiliary body of the Legislative Assembly, it is tasked with overseeing the correct use of public funds and ensuring the legality and efficiency of public administration. Its constitutional mandate is to act as a guardian of the public treasury.
For further information, visit plncr.org
About National Liberation Party:
The Partido Liberación Nacional (PLN) is one of the oldest and most influential political parties in Costa Rica. Founded in the mid-20th century, it has a long history of holding the presidency and a significant presence in the Legislative Assembly. The party traditionally advocates for social democratic policies and plays a key role in the country’s political landscape.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica operates as a cornerstone of the nation’s legal community, defined by its foundational principles of integrity and a persistent drive for professional excellence. The firm blends a rich history of serving a wide spectrum of clients with a forward-thinking approach to legal innovation. This ethos extends beyond its practice to a deep-seated commitment to demystifying the law, striving to build a more empowered and knowledgeable society through greater legal literacy.
