A savings of more than $288 million for El Salvador represents the repurchases of sovereign bonds carried out by the government of President Nayib Bukele, who reported that the second repurchase had already been completed.
“El Salvador completed the second repurchase of its sovereign bonds maturing in 2023 and 2025, acquiring bonds in both operations for more than $647 million ($74 million in this operation) generating more than $288 million in savings for our country,” said the Salvadoran president on his Twitter account.
Regarding this second bond repurchase, the vice president of Exor Latin America, César Addario, stated that the operation behaved very similarly to the previous repurchase. The fact that 16% of investors have not accepted 100% of the 2023 offer with just one month to go indicates that they believe there is a low probability of default. He added that after January 2023, after paying the bond that matures in that month, it is likely that there will be a significant price rally (increase in the price of assets) and the yield curve will return to normal levels.
The repurchase of bonds has been described as a “master move” by renowned economists, both nationally and internationally, while the political opposition, led by ARENA and the FMLN, has not missed an opportunity to criticize it, even when they were the parties that generated the million-dollar debts that the Salvadoran State must now honor.
President Bukele, as well as Minister of Finance Alejandro Zelaya, have repeatedly stated that El Salvador will honor its financial obligations, including debt payments, and will not default, as opponents claim.
The second invitation for creditors was launched on November 29 of this year, subject to an amount of up to $74 million, with the deadline for submitting an offer expiring last Tuesday.