deuda bonificada

stef115

Member
English - US
Hi everyone,

I have some doubts about how to translate the "bonificada" part of "deuda bonificada" in the following context (from a Guatemalan news article). I'm thinking it just refers to the national debt (synonymous with public or sovereign debt?), but am wondering if there's some additional meaning I'm missing.

"El Ejecutivo propondrá reestructurar el manejo de la deuda bonificada y sustituirla con la aprobación de préstamos con organismos internacionales."

Thanks!
 
  • lauranazario

    Moderatrix
    Español puertorriqueño & US English
    Hi everyone,

    I have some doubts about how to translate the "bonificada" part of "deuda bonificada" in the following context (from a Guatemalan news article). I'm thinking it just refers to the national debt (synonymous with public or sovereign debt?), but am wondering if there's some additional meaning I'm missing.

    "El Ejecutivo propondrá reestructurar el manejo de la deuda bonificada y sustituirla con la aprobación de préstamos con organismos internacionales."
    In this sentence you provide, they seem to be referring to the debt associated with the issuing of bonds (bonos), differentiating it from the debt associated with a central government (or a specific government agency) taking out a loan for a given project (like improving roads or any infrastructure-related initiative).

    Therefore, a simple-to-understand equivalency would be: deuda bonificada = bond-related debt

    Hope that helps.

    saludos,
    LN
     

    stef115

    Member
    English - US
    Hi lauranazario - that's super helpful, thank you. The focus of the article is indeed financing through bonds vs financing through loans (issued by the IMF and World Bank). It later references "el saldo de la deuda pública" (presumably the total public/national debt), which if I understand correctly would be differentiated from the "deuda bonificada", or bond-related debt?

    Thanks again,
    S
     

    boroman

    Senior Member
    Español - España
    Son domestic/ national public debt bonds, quiere decir que ya no emite bonos sino que pide ayuda al FMI y al Banco Mundial.
     

    stef115

    Member
    English - US
    Ok gracias, Boroman. I think I'm following. I'm not yet clear on how assistance via IMF/WB bonds differs from IMF/WB loans, but that might be another thread.

    For example, I can't tell if public debt bonds are different from those discussed here? UPDATE 2-Guatemala draws robust demand on new social bond | IFR

    I'm seeking clarity because the Guatemala article discusses the interest saved by restructuring the deuda bonificada into IMF/WB loans.

    Here's the article: “Es más barato que colocar bonos”: La estrategia de Finanzas para bajar los intereses de la deuda.

    Financing isn't my specialty (clearly, haha)...this is part of a course I'm taking on Comparative Systems and I figured others might also benefit as I struggle to understand the world of money. :)
     

    Joe Esquire

    Senior Member
    Spanish Spain- English US
    It is generally less expensive to borrow directly via loans from the WB or IMF, at preferential rates for developing countries, than to borrow in the open market via the issuance of sovereign bonds, where the the borrower has to compete with market rates and many other borrowers (countries having a similar risk rating) who are also issuing similar bonds.

    IMF and WB rates are normally at LIBOR plus 25 bps. (10 yr. LIBOR + 25 bps= 2.03 %)
    Guatemala 22s (10 year sovereign bonds outstanding) bear a coupon of 5.75%

    A substantial difference in financing costs.

    Regards,

    je
     

    stef115

    Member
    English - US
    It is generally less expensive to borrow directly via loans from the WB or IMF, at preferential rates for developing countries, than to borrow in the open market via the issuance of sovereign bonds, where the the borrower has to compete with market rates and many other borrowers (countries having a similar risk rating) who are also issuing similar bonds.

    IMF and WB rates are normally at LIBOR plus 25 bps. (10 yr. LIBOR + 25 bps= 2.03 %)
    Guatemala 22s (10 year sovereign bonds outstanding) bear a coupon of 5.75%

    A substantial difference in financing costs.

    Regards,

    je
    Extremely helpful, Joe. Thanks.
     
    Top