How Cryptocurrency Crash Could Bankrupt El Salvador
- Thread starter Nobert
- Start date
The video says his plan was to issue $1 Billion bitcoin backed bond to pay off some other $800 million bond that is due in Jan 23. But with the Bitcoin price crashing he wont be able to do this. So high risk of defaulting on that $800 million he needs to pay back.
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I did not watch the video, and I do not know if the 800 million bond info is correct.
Nonetheless, the scenario does appear to promote a NEED for a greater fool.
Perhaps a few of the 44 attendees as discussed here... https://www.elitetrader.com/et/threads/el-salvador-to-host-44-countries-to-discuss-bitcoin.367127/
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LOL\BAD NEWS + good news.
The good news is they can still export coconuts, coffee, bananas, melons + mangos.
The bad news if they are dumb enough to get conned by a bitcon, that could threaten every export??They should privatize the railroad + US do the same for Amtrack
Prolly nothing...
https://www.bloomberg.com/news/arti...-its-deeply-distressed-dollar-bonds#xj4y7vzkg
El Salvador Bonds Surge on Bukele’s Plan for Buyback at Market Prices
Nayib BukelePhotographer: Andrew Harrer/Bloomberg
By
Maria Elena Vizcaino and
Sydney Maki
July 26, 2022 at 11:53 AM PDTUpdated onJuly 26, 2022 at 1:58 PM PDT
El Salvador President Nayib Bukele announced plans to buy back the nation’s dollar-denominated bonds due in 2023 and 2025, spurring a double-digit jump the price of the junk-rated securities.
Bukele on Tuesday said in a series of tweets that he sent two bills to lawmakers that would lock in plans for a “transparent, public and voluntary” purchase offer that will start in six weeks for the government debt at market prices. Finance Minister Alejandro Zelaya said the nation would use special drawing rights dispersed by the International Monetary Fund, multilateral funding, and a new bond deal with the central bank to finance the purchases.
The nation’s dollar bonds set to mature in January 2023 rose nearly 10 cents after the announcement to 86 cents, according to indicative prices compiled by Bloomberg. The 2025 notes, meanwhile, were up 16 cents to be quoted at 52 cents, the highest since mid-April.
Bukele’s Nuevas Ideas party holds a two-thirds majority in El Salvador’s unicameral legislature, meaning the bills can be swiftly approved. Ernesto Castro, president of the legislative assembly, said the bills will be introduced Tuesday and submitted for discussion and approval to the floor, saying the step was important for the country.
There’s $1.6 billion outstanding in bonds due 2023 and 2025 combined, and Bukele promised to buy them back at their market prices, acknowledging prices may rise once the buyback begins.
Guillermo Guerrero, an analyst at EMFI Group Limited, said he expects prices on the front-end notes to move closer to par as long as the offer is seen as credible. The nation’s bonds have been trading at levels considered in distress, with some traders wary of the government’s financing options.
adopting Bitcoin as legal tender, a move that -- along with a shake-up in the top courts -- stoked some uncertainty among both credit rating agencies and money managers. El Salvador is one of the emerging-market nations most vulnerable to a default, according to a Bloomberg Intelligence analysis earlier this month.
Read More: Morgan Stanley Says Buy Salvadoran Bonds Battered by Bitcoin Bet
“It makes a lot of sense given the depressed prices of Salvadoran bonds, but I think the government would have obtained better results in terms of saving resources if it had conducted the buyback in a covert way,” said Ramiro Blazquez, head of research and strategy at BancTrust. “There are still many details that we don’t know, such as the magnitude of the buyback. But it’s definitely good news since it sets a floor to prices and it will do much to ease default fears.”
https://www.bloomberg.com/news/arti...-its-deeply-distressed-dollar-bonds#xj4y7vzkg
El Salvador Bonds Surge on Bukele’s Plan for Buyback at Market Prices
- Goverment will make ‘transparent, public and voluntary’ offer
- The program will start in six weeks, Bukele tweeted Tuesday
Nayib BukelePhotographer: Andrew Harrer/Bloomberg
By
Maria Elena Vizcaino and
Sydney Maki
July 26, 2022 at 11:53 AM PDTUpdated onJuly 26, 2022 at 1:58 PM PDT
El Salvador President Nayib Bukele announced plans to buy back the nation’s dollar-denominated bonds due in 2023 and 2025, spurring a double-digit jump the price of the junk-rated securities.
Bukele on Tuesday said in a series of tweets that he sent two bills to lawmakers that would lock in plans for a “transparent, public and voluntary” purchase offer that will start in six weeks for the government debt at market prices. Finance Minister Alejandro Zelaya said the nation would use special drawing rights dispersed by the International Monetary Fund, multilateral funding, and a new bond deal with the central bank to finance the purchases.
The nation’s dollar bonds set to mature in January 2023 rose nearly 10 cents after the announcement to 86 cents, according to indicative prices compiled by Bloomberg. The 2025 notes, meanwhile, were up 16 cents to be quoted at 52 cents, the highest since mid-April.
Bukele’s Nuevas Ideas party holds a two-thirds majority in El Salvador’s unicameral legislature, meaning the bills can be swiftly approved. Ernesto Castro, president of the legislative assembly, said the bills will be introduced Tuesday and submitted for discussion and approval to the floor, saying the step was important for the country.
There’s $1.6 billion outstanding in bonds due 2023 and 2025 combined, and Bukele promised to buy them back at their market prices, acknowledging prices may rise once the buyback begins.
Guillermo Guerrero, an analyst at EMFI Group Limited, said he expects prices on the front-end notes to move closer to par as long as the offer is seen as credible. The nation’s bonds have been trading at levels considered in distress, with some traders wary of the government’s financing options.
adopting Bitcoin as legal tender, a move that -- along with a shake-up in the top courts -- stoked some uncertainty among both credit rating agencies and money managers. El Salvador is one of the emerging-market nations most vulnerable to a default, according to a Bloomberg Intelligence analysis earlier this month.
Read More: Morgan Stanley Says Buy Salvadoran Bonds Battered by Bitcoin Bet
“It makes a lot of sense given the depressed prices of Salvadoran bonds, but I think the government would have obtained better results in terms of saving resources if it had conducted the buyback in a covert way,” said Ramiro Blazquez, head of research and strategy at BancTrust. “There are still many details that we don’t know, such as the magnitude of the buyback. But it’s definitely good news since it sets a floor to prices and it will do much to ease default fears.”
If that were to ever happen, Amtrak would be worth zero, instantly, and would go away. Without subsidies, Amtrak is worth ZERO.
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SI senior\yes MR..............................................................................
