Bondholders of the Municipality of Asunción will decide on September 16 whether to begin legal action against the municipality if the administration of Mayor Luis Bello does not prove that it made the G. 41.101 billion payment promised for the previous day. The meeting was called by Valores Casa de Bolsa SA, the creditors’ representative, and will be held in Tower 3 of Paseo La Galería, with the first call at 11 a.m. and the second at noon.
The meeting will cover the G5 issuance, launched during Mario Ferreiro’s administration, and G6, G7, G8 and G9, issued during the administration of former Mayor Óscar “Nenecho” Rodríguez. Bello’s commitment came after the municipality stopped paying interest installments on the bonds in May 2025.
In June, the Municipal Council rejected a second settlement proposal submitted by the creditors. Even without the councilors’ approval, Bello had already made a partial payment of G. 50.941 billion and committed to disbursing another G. 41.101 billion on September 15. In return, the bondholders agreed to postpone until March 2027 the maturity of a balance of G. 181.048 billion in principal and interest.
If the schedule is maintained, the next municipal administration will inherit an obligation of nearly US$31 million. The accumulated overdue debt since Bello took office has reached G. 130.286 billion, or US$22.3 million, after his administration failed to pay G. 35.734 billion in interest between June and August.
The history includes G. 30.246 billion in unpaid coupons during Rodríguez’s administration and another G. 20.694 billion accumulated during the municipal intervention led by Carlos Pereira between June and August. The G. 50.941 billion payment settled those earlier amounts but did not prevent new arrears from building up.
The financial crisis is also affecting projects financed through the bonds. Of the eight urban drainage interventions planned under the G8 issuance, worth G. 360 billion, four were started and none was completed. The projects in Santo Domingo, San Pablo and Abasto were 35%, 46% and 59% complete, respectively, while the General Santos project showed no progress at the site.
The delay is linked to the diversion of G. 512 billion from the G8 issuance to current expenses, mainly salaries, as noted by the Office of the Comptroller General of the Republic and documented by the intervenor. Projects planned under the G6 and G7 issuances, such as the revitalization of 10 squares and renovations at Asunción’s Bus Station, were also not fully carried out or had their intended use changed.