El Salvador Buys Back $565M Worth of Bonds, Plans to Launch New Offering in 8 Weeks
The bond repurchase is seen as an attempt by El Salvador to dispel rumors of a potential default on its debt.
El Salvador has bought back a portion of its sovereign debt bonds maturing in 2023 and 2025 totaling $565 million, President Nayib Bukele said on Wednesday.
According to official information, El Salvador purchased 54% of the bonds maturing in 2025 for a total of $432 million. It bought 22.4% of the bonds maturing in 2023, for a total of $133 million.
Bukele said that El Salvador will launch a new offer for the remainder of the 2023 and 2025 bonds in eight weeks. As with the latest repurchase, it will be done “at market prices,” Bukele added. According to Bukele, the initial repurchases have saved the country more than $275 million.
The bond repurchase, launched on Sept. 12, is seen as an attempt by El Salvador to dispel rumors of a potential default on its debt. The Central American country has had strained relations with the traditional credit market, particularly after it established bitcoin (BTC) as legal tender in September 2021
Last week, Fitch Ratings downgraded El Salvador's long-term foreign currency issuer default rating (IDR) from CCC to CC and indicated that the country is likely to default on its bond maturing in early 2023.
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