El Salvador is once again taking steps to manage its debt by offering to buy back a series of dollar-denominated bonds, marking the third such move this year. The government, led by President Nayib Bukele, has opened an offer to repurchase bonds maturing between 2027 and 2034, with a combined value exceeding $2.5 billion. This initiative follows a recent rally in Bitcoin’s value, alongside the results of the US presidential election, which have buoyed investor sentiment.
The details of how this transaction will be financed remain unclear, though sources familiar with the matter suggest that new funding will be needed to complete the buyback. Bloomberg reported that while the buyback is seen as a positive sign for the country’s financial management, it is expected that El Salvador will need to secure additional financing through the market.
Investors have taken notice of El Salvador’s debt, which has seen a 4.7% return since the US election results, outpacing all other emerging-market peers except for Ukraine. Some market observers view the relationship between Bukele and US President Donald Trump as a factor that could help secure an International Monetary Fund (IMF) loan, despite ongoing concerns over the country’s use of Bitcoin as legal tender.
The IMF has expressed reservations about El Salvador’s Bitcoin policy, but the country’s recent Bitcoin gains have significantly increased the value of its holdings, now estimated at $515 million. In addition to this latest debt buyback offer, the government has previously engaged in innovative financial moves, including a debt-for-nature swap that bought back $1 billion in bonds, aiming to fund environmental conservation.
The buyback, managed by Bank of America, will close on November 18, with a settlement set for November 25
