Republic President Nayib Bukele announced that a second round of early purchase offers for the remaining 2023 and 2025 bonds hit the market this Tuesday.
“As promised, today we are launching an offer to purchase foreign debt maturing from 2023 to 2025. All bondholders in El Salvador will have access to this voluntary buyback,” the president wrote on Twitter. rice field.
The invitation is contingent on an amount not to exceed $74 million to purchase the principal amount of the accepted notes and to pay accrued interest.
and release The invitation is detailed to end at 5:00 PM on December 6, 2022 unless extended or terminated earlier. Settlement of the accepted bonds is scheduled for December 8, but El Salvador reserves the right to delay the date without extending the maturity date.
Last September, the government of El Salvador launched its first purchase offers for the 2023 and 2025 bonds, each carrying $800 million in debt. At the end of the competition, an agreement of $565.63 million was reached. This is 35.3% of the total debt for both issues.
In that offer, investors with January 2023 ownership offered to sell $179.4 million, of which $133.04 million (16.3%) was agreed to be purchased, with the remainder of $666,696. It was a million dollars.
The highest offer from investors issued in 2025 was $432.5 million, representing 54% of the outstanding amount and a shortfall of $367.5 million.
operations in crisis situations.
It is the first time El Salvador has resorted to debt buybacks, amid intense pressure from concerns that the government will not have sufficient liquidity to meet the January 2023 bond maturity. The operation that was performed.
After the government failed to reach an agreement with the International Monetary Fund (IMF), the bond market deemed El Salvador to be very risky and the Finance Ministry, despite that fact, had no conditions to go abroad and issue debt. He pointed out that he had run out. We have indicated several times that funds have been set aside in the budget to honor our commitments.
This sent El Salvadoran government bonds lower in the market, with the 2023 banknote worth $62 in July. However, these securities will go public on November 29 at his $90.1, after the buyback announcement and payment obligations by the president were made public.
Meanwhile, the 2025 issue hovered around $40 and was trading at $57.6 on Tuesday, up 44% from July, but still far from 100 base points.
Country risk, as measured by the Emerging Markets Bonds Index (EMBI), has also declined from the peak seen last July. The highest score was 35.12 points on July 15th and 19.98 points on November 28th. El Salvador was her second most dangerous country in Latin America this year, but the drop has made her third behind Argentina (23.84) and Venezuela (347).
Source: Diario.Elmundo
