ASUNCION Feb 22 Paraguay's Supreme Court ruled
in favor of the Treasury Ministry on Wednesday in a dispute over
the constitutionality of a proposed bond sale, allowing it to
issue $550 million in debt next month.
President Horacio Cartes' government plans to use the sale
to pay off existing debt and finance infrastructure projects in
the landlocked South American country.
Opposition legislators and dissident members of Cartes'
center-right Colorado party had challenged the constitutionality
of the planned sale. In December, Cartes vetoed a budget
proposal passed in Congress that limited the amount of debt
issuance allowed to $349 million.
The unprecedented budget veto meant that the 2016 budget
remained in place, but the opposition claims that does not give
the Treasury Ministry the authorization to sell bonds.
"Even though it's not a requirement to have a favorable
ruling from the Supreme Court, we asked for this Action of
Judicial Certainty as an assurance to international investors,"
the Treasury Ministry said in a statement.
Legislators have threatened to notify international bodies,
rating agencies and bondholders that an eventual issuance could
lack legal backing.
The grains-exporting country has issued $1.88 billion in
debt since Cartes, a businessman, came to power in 2013.
(Reporting by Daniela Desantis; Writing by Luc Cohen; Editing
by Richard Chang)