The Social Security Institute (IPS), Paraguay’s social security institution, cut from G. 160 billion to G. 80 billion the amount that may be held temporarily in the trust account administered by Banco Atlas. The third amendment to the contract allows up to an additional G. 80 billion to be made available to the Sickness and Maternity Fund, without changing payments on the bonds that financed the fund’s infrastructure works.
Revenue collected by the Sickness and Maternity Fund is transferred to the account administered by Banco Atlas. The amount needed to pay principal and interest on the bonds issued is taken from it; the remainder is returned to IPS. The change lowers the temporary reserve cap, while the institute’s financial obligations and the payment mechanism remain in force.
IPS says the change was made nearly nine years after the first bond issue, during which commitments were met on time and part of the debt was repaid. The institute presents the amendment as a way to increase liquidity and improve management of the resources available to meet the needs of its insured members.
Since the trust was established, bonds totaling G. 828.8 billion have been issued. Of that amount, G. 258.445 billion in principal has already been repaid—about 31%, according to figures released by Banco Atlas. The funds held in the trust account also generated financial returns, the bank said.
Banco Atlas said the change followed a technical assessment of the trust’s progress. In April 2024, the bank had proposed lowering the cap to the previous IPS administration; agreement to proceed with the change was communicated in July 2026, the bank said. It added that it will continue working with IPS and regulatory authorities in accordance with the contract and applicable rules.
The reduction in the cap does not mean an additional reduction in the debt and does not change the scheduled flow of payments to honor the bonds. According to IPS, it allows up to G. 80 billion more to be made available to the Sickness and Maternity Fund, while Banco Atlas remains responsible for administering the trust account under the agreed terms.