Bitcoin-friendly El Salvador sees bond returns soar to 70% in 2023
El Salvador paid $800 million in debt at the start of the year before the maturing period, raising the confidence of investors, as President Bukele says "told you so".
El Salvador, which adopted Bitcoin as legal tender in 2021, has seen its dollar bond outperform the majority of the emerging markets with a 70% return in 2023. The massive rally of the bond has now drawn interest from several institutional giants like JP Morgan, Eaton Vance and PGIM Fixed, prompting President Nayib Bukele to say, “I told you so.”
Apart from the institutional giants, the likes of Lord Abbett & Co LLC, Neuberger Berman Group LLC and UBS Group AG have also added debt security since April, reported Bloomberg.
The growing demand for El Salvador’s debt security in 2023 is quite a contrast to its performance a couple of years ago when it first adopted Bitcoin as a legal tender. The BTC adoption created uncertainty among investors who bet against the country’s bonds, with several financial agencies casting a shadow of doubt on the country’s financial future.
In Feb 2022, the American credit rating industry Fitch, lowered the country’s long-term Issuer Default Rating from B- to CCC, citing policy uncertainty and the Bitcoin adoption along with an $800 million debt payment due for January 2023.
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