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Liability Management Operation   



The Dominican Republic made the biggest liability management transaction in its economic history. This transaction was carried out taking the company PDVSA as a counterpart.

The transaction was closed on January 27th, and consisted in the early redemption of accumulated debt with PDVSA for US$4,027.3 million, by paying the sum of US$1,933.1 million, resulting in a public debt stock reduction of US$2,094.2 million, equivalent to 3.3% of GDP.

These transaction amounts to a debt settlement at a price of 48%, thereby producing a saving of US$107.1 million in current value and US$562.7 million in net present value.

The amount of US$1,933.1 million paid to PDVSA were raised last week in international capital markets through the issuance of Dominican Republic of bonds with maturities of 10 and 30 years.

On the other hand, also this operation succeeded in increasing the average maturity period of the debt portfolio, as the debt owed to PDVSA had an average time of maturity of 11.4 years, while the average time to maturity of the US$1,933.1 million in bonds is 19.7 years.