El Salvador: Debt refinancing project presented

The Ministry of Finance will present two law projects to Congress in order to obtain $950 million in creidt to refinance the debt.

Tuesday, October 7, 2008

If approved, the first loan would be from the Inter-American Development Bank (IDB), for a total of $500 million; the second would be from the World Bank for a total of $450 million.
According to the Minister of Finance, William Handal, $300 million of the funds granted by IDB would be used to for eurobonds payment (since there is a debt of $650 million that will expire in 2011), and the remaining $200 million would be used to restructure part of the debt or for new projects.

More on this topic

Salvadoran Congress authorizes negotiations for lines of credit

November 2008

Congress authorized the Government to sign two lines of credit with international banks for $950 million.

These funds will be used to pay for the refinancing of Eurobonds which expire in 2011 and for social projects.

The authorizations, which passed with 74 votes in favor, allows the Government to get $500 million from the IDB and $450 million from the World Bank, of which $650 million will be used to pay for the Eurobonds and the remaining $300 million for social programs.

Government of El Salvador should renegotiate debt

September 2008

As the terms grow shorter, the World Banks has doubts about how the country will pay its debt of more than $600 million in Eurobonos.

The payment of this debt is due in 2011, and according to Humberto Lopez, Chief Economist for Central America at the World Bank, El Salvador should try to solve the problem.

To refinance debt for 30,000 honduran producers

December 2008

The National Agriculture Development Bank will readjust the debt for at least 30 thousand farmers that were affected by the strong rains last October.

Cornelio Chirinos, secretary of the Honduras Coordinating Council for Farming Organizations (COCOH), encouraged farmers to speed up the process to get the refinancing in order to guarantee next year's harvest.

Salvadoran State Falls Behind in its Payments

March 2009

The decrease in tax revenue, mainly from value added tax and customs tariffs, have prevented the timely payments of the State’s obligations.

The elimination of the electricity subsidy payments, which affects those who consume in excess of 99 kilowatts, was a decision that was forced upon the Salvadoran government by the decline in revenues in the face of the economic downturn affecting the country.

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