San Salvador – El Salvador’s sovereign bonds have seen significant growth in 2024, with some trading at or above nominal value. This trend accelerated after the IMF announced a $1.4 billion financing agreement with the Salvadoran government on December 18, part of a $3.5 billion support package.

Exor Latin America confirmed that the announcement boosted bond prices, particularly those maturing in 2027 and 2034, which rose to $99.37 and $94.50, respectively. Additionally, the yield on 2025 bonds fell from 10.82% to 7.91%, reflecting reduced investor-perceived risk.

The IMF agreement, viewed as a key step for securing better financing terms and economic stability, also signals international confidence in El Salvador’s financial management. Exor highlighted that this development validates the government’s economic approach and enhances its credibility.

The announcement follows Moody’s upgrade of El Salvador’s credit rating from Caa1 to B3, citing improved security, effective debt management, and better growth prospects. Analysts attribute these gains to domestic fiscal measures, including debt buybacks and a budget approved without external financing.