El Salvador will launch a second debt buyback offer

A second debt repurchase operation was announced by the President of the Republic, Nayib Bukele, after the successful early purchase of debt executed by the Salvadoran government, where he acquired part of the bonds maturing in 2023 and 2025, for a total of $565 million.

«The operation was so successful that we have decided to launch another offer for the rest of the 2023 and 2025 bonds. Always publicly, transparently and at market prices at the time of the next repurchase, which will take place in eight weeks,» the President posted on Twitter.

President Bukele highlighted on Wednesday that the favorable reception by investors to the early purchase offer of securities with maturities in 2023 and 2025, means savings of $275 million, which makes it attractive to launch a second operation to reacquire the totality of the two closest debt issues.

According to Bloomberg magazine, the success of the repurchase also allowed a rebound in the price of Salvadoran bonds. For example, the issue maturing in 2050 was quoted almost $0.05 higher, that is, $0.35 per dollar, which represents the lowest price ever recorded since the end of July this year.

For his part, the Minister of Finance, Alejandro Zelaya, confirmed that El Salvador saved more than $275 million by carrying out this historic operation. «Many thanks to our investors and to the entire technical team involved in the operation. More news about our liability management strategy very soon »he expressed.

He added that the payment of the $565.6 million in bonds, which the Republic repurchased, has already been deposited with the bondholders.

In tune with this vision, the vice president of Exor Latin America, César Addario, said: «The clear messages of the transaction are that the government is interested in prepaying the bonds and prioritizing the external debt and, on the other hand, that it has security of the ability to pay the bonds maturing in January 2023.

According to Addario, the advance purchase maneuver allows El Salvador to demonstrate its ability to pay in international markets.

For his part, the president of the BCR, Douglas Rodríguez, also considers that with these actions the government demonstrates its commitment to paying the debt.

«This government does not delegate or relegate, but rather fulfills the commitments made as a country, and it is important that we comply before the established deadlines,» he said.

He added that, with the savings of $275 million, the government will invest more in security, in health, in education, in work, in projects, and always for the benefit of the Salvadoran people».