The plan envisages the sale of $1.8 billion in global bonds and the reorientation of $950 million in World Bank and IDB loans to make payments on short-term debt.
With the bond sale, the country seeks to restructure its debt so that it depends more on the long rather than the short term.
According to a Reuters article published in Forbes.com: "This plan aims to give the next president, Mauricio Funes, a respite to solve the fiscal problems that led Standard and Poor's to lower El Salvador's debt rating."
The objective would be to swap short term Treasury notes, which will expire soon.
In May Congress approved a $1.800 million debt plan, which includes $800 million for facing the due date of short term debts, as well as $650 million for the expiration of foreign debt.
The Salvadoran Foundation for Social and Economic Development(FUSADES), recommended the issuance of $800 million worth of Euro-bonds to cover the expiration of the Treasury Notes. This way, a short term debt would be restructured into a long term one.
The highest percentage of external debt is with multilateral organizations; to the IADB alone $2,192 million are owed.
Of the total debt, 39% corresponds to the Inter-American Development Bank (IDB), 24% to the International Bank for Reconstruction and Development (IBRD), 19% to the Central American Bank for Economic Integration (BCIE), and the rest to others.
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