El Salvador has initiated the process of purchasing its sovereign bonds that are due between 2027 and 2052.
El Salvador has successfully implemented financial liberty under the leadership of President Nayib Bukele. As of now, “El Salvador has fulfilled its vow. We have recently accepted offers for debt repurchase totaling $940,441,670.83,” stated Nayib Bukele in a tweet on X.
As part of the official announcement at the beginning of October, the project is a comprehensive initiative that aims to proactively manage El Salvador’s external public debt and to advance specific conservation and sustainability initiatives.
El Salvador may repurchase or redeem the Notes that were not tendered or purchased in the invitation, as well as other of its public debt, in the future.
The reported method for determining the main amount of each holder’s validly tendered Notes that are accepted for purchase is to multiply the tendered amount by the estimated proration factor given by El Salvador, and then to round the result down to the closest American dollar.
El Salvador approved proposals for prorated notes as long as (i) the holder of those notes does not transfer them to the Republic for any amount less than U.S. $5,000 for the 2027 and 2029 notes, below U.S. $10,000 for the 2034 and 2035 notes, or below U.S. $150,000 for the 2030 notes, Interest Only notes, 2041 notes, 2050 notes, and 2052 notes, whichever is applicable.
In addition, (ii) the return of Notes to the appropriate holder in a principal amount that is less than the applicable minimum denomination. The Republic is prepared to accept or reject the entire tendered amount if proration results in a return to the holders that is less than the applicable minimum denomination.
El Salvador’s national debt is anticipated to increase by 9.1 billion US dollars between 2024 and 2029, which is a 30.5 percent increase, according to projections. It is anticipated that the national debt will reach a new high of 38.93 billion US dollars in 2029, following the tenth consecutive year of sustained growth.
The International Monetary Fund defines the general government gross debt as the sum of all liabilities that necessitate the debtor to pay interest and/or principal to the creditor at a future date or dates.
Nayib Bukele declared that the nation would cease to depend on loans to sustain its operations during El Salvador’s Independence Day in 2024. The earlier initiative is consistent with the nation’s strategy of self-sufficiency and evasion of the IMF’s financial constraints.
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