El Salvador has postponed its planned $1 billion bitcoin bond offering because of unfavorable market conditions, Finance Minister Alejandro Zelaya said on Tuesday on Salvadoran TV show "Frente a Frente."
- The offering was initially scheduled to take place between March 15-20, but the Russia-Ukraine war and the war's impact on the price of bitcoin caused the government to change the date, according to Reuters.
- "I think this is not the time. There are some moves on the planet," Zelaya said, adding that he prefers the issuance to occur between March and April. "In May and June sometimes you can, but the market variables get different. After September, it is difficult to raise, unless you are previously funded, as in the case of bitcoin bond," he added.
- According to Zelaya, the bitcoin bond will have a "substantial oversubscription" that could reach $1.5 billion.
- President Nayib Bukele announced plans in November to build a “Bitcoin City” funded by the sale of the bonds, which have an annual coupon of 6.5%. Half the funds will be used to accumulate bitcoin (BTC), with the rest earmarked for infrastructure and bitcoin mining powered by geothermal energy.
- According to Zelaya, the bond will be issued by state-owned thermal energy company La Geo and will have a sovereign guarantee provided by the Salvadoran state.
UPDATE (March 22, 2022, 22:10 UTC): Added details and background in third and fourth bullet points.
UPDATE (March 23, 2022, 23:25 UTC): Added comments from Alejandro Zelaya.
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