El Salvador’s $1 billion in so-called "volcano bonds" have yet to hit the market, with volatile international conditions likely a key culprit in the delay.
- Last week, El Salvador Finance Minister Alejandro Zelaya - who previously said the bond sale could come between March 15 and March 20 - noted the war between Ukraine and Russia could slow the process. “We have the tools almost finished, but the international context will tell us,” he told a local TV station.
- Indeed, while legislators in El Salvador still had work to do regarding the bonds, lawmakers over the past week or two have instead been preoccupied with the repercussions - supply chain shocks among them - of the Ukraine war. As of March 15, the laws necessary for the bonds had not been sent to Congress, according to a report from local newspaper La Prensa Gráfica.
- In November 2021, President Nayib Bukele announced plans to build a “Bitcoin City” funded by the sale of the bonds, which have an annual coupon of 6.5%. Half of the funds will be used to accumulate bitcoin (BTC), with the rest earmarked for infrastructure and bitcoin mining powered by geothermal energy.
- As of press time, no representative of the Salvadoran government had made an announcement regarding the bitcoin bond, and President Bukele's office did not respond to CoinDesk's inquiries about a new estimated date.
- A report in the Financial Times adds a bit more intrigue, saying the bonds will not be issued by the government of El Salvador, but instead by state-owned thermal energy company La Geo. Further, Americans will not be eligible to buy the paper, as it will trade on Bitfinex, which isn’t available in the U.S.
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