Desperate for cash, Honduras to hawk bonds(Read article summary)
Honduras is broke, writes a guest blogger, and despite a recent credit downgrade it is now trying to privately place over $750 million in bonds.
• A version of this post ran on the author's blog. The views expressed are the author's own.
Honduras is broke.
It can't pay government employees, contractors, or suppliers. Its not unusual for teachers to go six months between paychecks under Porfirio Lobo Sosa. Road construction has stopped again due to government debts to the construction companies. It stopped paying the IHSS, the government health provider, the fees it collected from government employees to pay for their health care, prompting IHSS to threaten to cut off government employees.
So what does a bankrupt government do?
Honduras is now seeking to privately place over $750 million in bonds. In that private placement, it is using Barclays and Deutsche Bank as its agents. These two banking firms have been hired by the government of Honduras to set up meetings with potential investors. Meetings have now been set up in London (March 4), New York (March 6), Boston (March 6) and Los Angeles (March 7).