Salvadoran Bitcoin Bonds Might Be Issued by State Geothermal Company La Geo, Delays Possible
The treasury minister of El Salvador, Alejandro Zelaya, has informed about the future of the issuance of the bitcoin bonds and the possibility of these being issued by La Geo, the national geothermal power company. Zelaya also referred to the day of issuance of these instruments, hinting at a possible delay that would see the bonds go out to the market in May or even July.
El Salvador Might Issue Bitcoin Bonds Through La Geo
The treasury minister of El Salvador, Alejandro Zelaya, gave his take on the issuance of the bitcoin bonds and how these might be linked to La Geo, the national geothermal power company. In an interview offered to a local television program, Zelaya stated that they will be issuing the bitcoin bonds through La Geo, which will have the responsibility of backing the instrument.
However, Zelaya reassured future investors, explaining that even under this model, the state would be responsible for the bond issuance, giving warranties to bondholders. On this, Zelaya declared:
If it is issued by La Geo or by the Salvadoran State, in the end, it is always a debt of the State. We as a state contribute all the capital. These are autonomous state companies.
The bitcoin bonds were proposed by the president of the country, Nayib Bukele, as a means of getting financing for constructing Bitcoin City, a city to be powered by geothermal energy. The first issuance of the bonds would be backed by bitcoin, offering 6.5%.
Issuance Date Still Undecided
Zelaya also referred to the exact date and time when these bonds will be issued, Zelaya stated that, according to his point of view, these bonds could go out to the market during the months of March and April. However, he noted that the situation is not favorable for this timeframe at the moment. He also mentioned that May and June could offer good conditions for the bond issuance, too.
Furthermore, the minister stated that after September there are poor opportunities for the issuance to have a big impact. Zelaya also informed that they expect to be oversubscribed, and mentioned $1.5 billion as the number the government expect to achieve with this initiative.
The country has been preparing its legal framework for the launch of these bonds since January when 20 bills were drafted to support their issuance.
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