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Bolivia Plans $500 Million Global Bond In 2012

MONTEVIDEO, Uruguay -(Dow Jones)- Bolivia's finance minister, Luis Alberto Arce, said Friday that the Andean nation could sell global bonds for up to $500 million this year to take advantage of investor interest in Latin American assets.

Arce said a placement could happen as early as the first half of this year.

"With the help of the Andean Development Corp. we are in the early stages of an issuance. We already have Congress' approval to issue up to $500 million," he said at a press conference in the Uruguayan capital.

Since last year, the finance ministry has been working on what Arce said would be the country's first global bond sale in almost a century.

"The objective of the bonds is to position Bolivia ... in the international financial community," he said.

Bolivia has hired Bank of America Merrill Lynch and Goldman Sachs Group Inc. (GS) as market makers in the upcoming placement, he said.

"We are in full talks with ratings firms," he added.

The government of Evo Morales, Bolivia's first indigenous president, has actively courted investors in recent years after his nationalization of the oil and gas industry in 2006 caused foreign investment, especially in the key energy sector, to plummet.

The Morales administration is hoping the charm campaign coupled with strong economic growth and six straight years of fiscal surplus will put landlocked Bolivia on the investment community's radar.

The government expects the economy to expand about 5.5% this year, up from an estimated 5.1% in 2011.

Arce said the government's funding strategy involves tapping international reserves, selling global bonds to fund public works, and extending maturities on domestic public debt.

The government is refinancing its domestic debts at longer maturities, up to 30 years, to reduce short-term interest payments, Arce said.

The national Treasury had $2.69 billion in foreign debt, and 31.53 billion bolivianos ($4.56 billion) in domestic debt at the end of 2011, according to official data.

Natural gas exports have allowed Bolivia to accumulate international reserves equivalent to about 50% of the country's overall economic output.

Today, Bolivia has just over $12.5 billion in reserves, well above the $8.0 billion to $8.5 billion that Arce said was the "optimum" level.

The minister said a law before Congress would allow the government to use a portion of those reserves for industrial projects.

Copyright © 2012 Dow Jones Newswires


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