Bitcoin enthusiast and El Salvador President Nayib Bukele announced plans to repurchase some of the country’s dollar-denominated bonds.
This strategic move aims to trim El Salvador’s external debt, further reducing fears of a potential default for the small Central American country.
The bonds targeted for repurchase include the 5.875% due in 2025, 6.375% due in 2027 and 8.625% due in 2029.
Over the past year, these bonds have shown remarkable recovery, particularly the 2029 bond, which climbed from 50 cents on the dollar to 90 cents. The decline in the sovereign risk premium — now 6.2 percentage points above U.S. Treasuries — further underscores the improved investor confidence in El Salvador’s financial health.
The total outstanding debt from the notes targeted in the buyback program is approximately $1.75 billion.
Oren Barack, managing director of Fixed Income at Alliance Global Partners in New York, told Bloomberg that this buyback represented a positive, forward-looking indicator of Bukele's government’s stability.
Analysts broadly expect El Salvador’s bonds to react favorably. However, despite the potential benefits, some money managers expressed caution, pointing to the triple-digit returns last year and the deteriorating fiscal accounts.
How Many Bitcoins Does El Salvador Own? What’s The Worth?
The Nayib Bukele Portfolio Tracker reported the country holds 2,825 Bitcoins, valued at approximately $407 million at current market prices.
In a recent update on X, Bukele revealed “a big chunk” portion of the country’s Bitcoin (CRYPTO: BTC) wealth has been moved to a cold wallet stored in a physical vault, which he refers to as El Salvador’s first “Bitcoin piggy bank.”
Photo: Shutterstock
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