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Bond Market News
El Salvador’s Dollar Bonds Rally on Debt Swap Tender Offer
October 8, 2024
El Salvador’s dollar bonds moved higher by over 2 points across the curve, following the debt-for-nature swap tender offer alongside promoting nature conservation. The nation will issue new notes that will be purchased by an SPV, and funded by using a loan from a unit of JPMorgan Chase. If it goes through as planned, then the savings from the cheaper borrowing costs of the new bond will be allocated toward nature conservation and wider sustainable goals. The structure resembles Ecuador’s debt-for-nature swap deal last year where the expected $1bn cost savings are expected to go towards protecting habitats in the Galapagos Islands. The swap tender offer will expire on October 10, and the transaction size will be known on October 15. Cesar Fernandez, an analyst at Alpha Credit Advisors said that the tender seemed “attractive” with El Salvador “offering to pay a premium”.
The 9 dollar bonds that would be purchased under the tender offer are its:
- 6.375% 2027s at $980 per $1,000 in principal. The notes currently trade at 97.1 cents on the dollar.
- 8.625% 2029s at $1,000 per $1,000 in principal. The notes currently trade at par.
- 9.25% 2030s at $1,015 per $1,000 in principal. The notes currently trade at 101.4 cents on the dollar.
- Macro Variable Interest Only Step-Up Notes at $24 per $1,000 in principal
- 7.625% 2034s at $875 per $1,000 in principal.
- 7.65% 2035s at $898.5 per $1,000 in principal. The notes currently trade at 89.6 cents on the dollar.
- 7.625% 2041s at $859.5 per $1,000 in principal. The notes currently trade at 85.7 cents on the dollar.
- 7.125% 2050s at $805 per $1,000 in principal. The notes currently trade at 80.2 cents on the dollar.
- 9.50% 2052s at $977 per $1,000 in principal. The notes currently trade at 97.7 cents on the dollar.
The Purchase Price does not include the applicable accrued and unpaid interest
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