El Salvador Aims to Buy Back Sovereign Bonds

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El Salvador plans to repurchase about $1.6 billion in sovereign bonds at market prices, part of a plan to cut down on debt and stave off fears of a default, President Nayib Bukele said on Tuesday, the Wall Street Journal reported. Bukele said on Twitter that his government sent two bills to congress to secure funds for “a transparent, public and voluntary” repurchase offer for bonds maturing in 2023 and 2025 at market prices in about six weeks. “El Salvador has enough liquidity” to meet debt payments and to buy all of its own debt up to 2025 in advance, Bukele wrote. Under current Salvadoran law, the government can’t use resources from the country’s central bank to pay the debt. Finance Minister Alejandro Zelaya said that the legislation aims to allow the use of some $400 million in international reserve assets—or special drawing rights—previously provided by the International Monetary Fund to member countries to supplement central bank reserves. The government plans to issue a 10-year bond to pay for the funds from the central bank. It also aims secure some $200 million from a regional multilateral lender, Zelaya said at a news conference. Read more. (Subscription required.)
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