The Salvadoran Government concluded its repurchase process for the 2023 and 2025 bonds with agreements for $565 million.
The President of the Republic, Nayib Bukele, announced this Wednesday the “successful” closing that will allow the State to save $275 million.
El Salvador launched its offer on September 12 for holders with 2023 and 2025 notes to offer their sale. This process closed with agreements for $565 million31.3% of the $1,800 million in debt of both issues.
For the 2023 titles, offers of $179.49 million (22.4%) were received, of which purchases were accepted for $133.04 million. This is equivalent to 16.3% of the $800 million issue.
As economists had warned, the largest offers were received by the 2025 issue for $432.5 million, which represents 54% of the amount owed.
“We have repurchased more than half (54%) of the $800 million foreign debt bond issued by the Government of Mauricio Funes, which must be fully paid in 2025. And we have begun to pay the $800 million bond issued by the Government of Francisco Flowers (from 2023)”, President Bukele published this afternoon.
The president announced that they will launch a new offer to try to sell the remaining bonds. “Always publicly, transparently and at market prices at the time of the buyback, which will take place in eight weeks,” he said.
This is the first time that El Salvador has carried out an operation of this type, in the midst of uncertainty regarding its ability to pay by the due date of 2023, after it failed to reach an agreement with the International Monetary Fund (IMF) and that had weighed down both the country risk such as sovereign ratings.
Economists had warned that investors would be inclined to sell more of the 2025 issue because for the 2023 issue there is a “public commitment” to pay, while for the next one there is uncertainty due to the 2024 presidential and legislative elections.