- Region: Latin America and the Caribbean
June 1, 2011
- Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe) *1 signed today a set of agreements to provide a guarantee for yen-denominated foreign bonds issued by the Government of the Oriental Republic of Uruguay (Uruguay) in the Japanese bond market (Samurai bonds).*2 This is a privately placed issue totaling 40 billion yen. JBIC's guarantee will cover the principal and part of the interest. The arrangers of this issuance are Nomura Securities Co., Ltd. and Daiwa Securities Capital Markets Co., Ltd. Mizuho Corporate Bank, Ltd. will also serve in this issue as the bond administrator.
- This guarantee was extended under the Guarantee and Acquisition toward Tokyo market Enhancement (GATE)*3 facility as part of JBIC's efforts to “maintain and improve the international competitiveness of Japanese industries.” By supporting Samurai bond issues by foreign issuers in the Tokyo bond market with credit enhancement through JBIC's guarantee, JBIC is helping to expand and diversify the investment opportunities available to Japanese investors and increasing the activity of the Samurai bond market.
- The Uruguayan Economy registered about 3% robust growth in 2009 even immediately after the global financial crisis, and in 2010 the economy grew by about 8%. The country has plans to implement power generation projects that are based on renewable energy sources. In addition, as Uruguay and other Southern Common Market (Mercosur)*4 member countries such as Brazil are expected to achieve high economic growth in the medium term, more vigorous Japanese business activities are foreseen in the country. This guarantee provision will help the Uruguayan government, which has primarily relied on the U.S. Dollar market for bond issues, diversify its funding sources. At the same time, it will strengthen bilateral relations and lead to the promotion of business transactions between the two countries.
- JBIC is committed to continuing its support for Samurai bond issues by foreign governments and government agencies in the Tokyo bond market.
- *1 JBIC is the international wing of Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
- *2 Samurai bonds are yen-denominated bonds issued by a foreign government or company in the Tokyo bond market.
- *3 See Press Release dated April 15, 2010.
- *4 A common market consisting of Argentina, Brazil, Paraguay, Uruguay and Venezuela, who agreed, in principle, to eliminate customs rights between the member states.