El Salvador’s ‘bitcoin bonds’ plan gets wary reception from fund managers

el salvadors bitcoin bonds plan gets wary reception from fund managers

Sumary of El Salvador’s ‘bitcoin bonds’ plan gets wary reception from fund managers:

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  • Article content President Nayib Bukele, who in September made bitcoin legal tender in the central American country, said on Sunday that half the proceeds would be used to buy the cryptocurrency with the rest going towards infrastructure and bitcoin mining.
  • Emerging markets fund managers expressed little interest in buying the new bonds, which El Salvador plans to issue next year with an annual coupon of 6.5 per cent.
  • That is far below the prevailing interest rate on the country’s existing overseas bonds, which have seen yields spiral higher this year as investors balk at the increasingly unorthodox direction of Bukele’s economic policy.
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  • Article content I don’t know who is going to buy these bonds but it sure as heck isn’t going to be usKevin Daly, fund manager, Aberdeen Standard Investments The sell-off in Salvadoran debt continued on Monday, pushing the yield on a bond maturing in 2032 above 13 per cent.
  • The new “bitcoin bonds,” which will be sold in US$100 tranches in a deal to be arranged by crypto exchange Bitfinex, may find a more receptive audience among small investors and crypto enthusiasts.
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