El Salvador’s Comisión Ejecutiva Hidroeléctrica del Río Lempa rewrote the country’s capital-markets playbook in 2025 with an inaugural international bond that combined scale, structure and timing in a way few expected from a first-time issuer. CEL’s $580 million senior unsecured notes due 2033 did more than fund the utility’s balance sheet: it reopened the international market for Salvadoran non-sovereigns after a decade-long absence and set a new benchmark for quasi-sovereign execution.
From a market perspective, the transaction’s impact extends well beyond CEL. It was the largest international bond ever issued by a Salvadoran non-sovereign and the first in 10 years, effectively reopening the market for corporates and public entities willing to meet international disclosure and structuring standards. By pairing a government-backed structure with a clearly articulated funding plan and disciplined execution, CEL turned investor curiosity into conviction, earning its 2033 notes the title of Quasi-Sovereign Bond of the Year.
The eight-year notes, issued under Rule 144A/Reg S and priced at par, carried a coupon and yield of 8.650%. It was rated in line with the sovereign at B3/B-, reflecting a government guarantee designed to be unconditional and irrevocable under New York law. That feature proved decisive. By enabling rating agencies to apply credit-substitution methodology, the structure positioned CEL as a true quasi-sovereign credit rather than a standalone utility risk.
Investor response was emphatic. Initial price thoughts were set at the 9.000% area, roughly 80–85 basis points over El Salvador’s curve. Demand built quickly during marketing, which paired CEL management with sovereign officials and provided investors with updates on fiscal performance, IMF negotiations and the utility’s operating profile. By launch, the orderbook had already reached close to two times covered. As large, long-only accounts came in with triple-digit million orders, peak demand climbed to $2.676 billion, equivalent to 4.61 times oversubscription.
That depth gave the issuer confidence to tighten guidance to 8.85% plus or minus 10 basis points and then price through guidance. The final yield landed around 60–65 basis points over the sovereign, a striking outcome for a debut issuer and a clear signal of investor conviction. Attrition during tightening was minimal, underscoring the quality of the book.
“There was strong interest, because we showed investors that CEL is a company with a solid capacity to generate financial flows to meet short-, medium- and long-term obligations through proper management of its assets,” says CEL president Daniel Álvarez. He adds that the transaction’s social and policy dimensions also mattered. “For many investors, this was an opportunity to acquire debt knowing that there was a strong guarantee from the state that mitigates risk,” he says.
Proceeds were allocated with unusual precision. CEL earmarked $500 million to refinance local bank debt and legacy obligations to multilateral lenders, extending maturities and reducing refinancing risk. The remaining $80 million was set aside to capitalize the Fondo de Mitigación del Sector de Energía, a price-stabilization mechanism designed to cushion volatility in electricity tariffs. That second tranche helped differentiate the deal, linking capital-markets funding directly to system-wide stability.
“Issuance of this bond was not only a financial operation, but a clear sign of CEL’s commitment to El Salvador’s electricity grid and a more sustainable energy model,” Álvarez says. Implementation of the stabilisation fund required legislative changes, with reforms passed in July to enable the transfer of the $80 million once the structure is fully in place.
Beyond refinancing, the bond supports a broader investment agenda. CEL operates five hydroelectric plants in the Lempa River basin with installed capacity exceeding 600 megawatts. It has expanded into solar generation, including a 21-megawatt plant inaugurated in late 2025, and is studying further diversification, including reviving the 261-megawatt El Cimarrón hydro project and developing wind capacity. CEL has also begun work on a biogas facility that will process around 70% of San Salvador’s wastewater to generate electricity, with financing from the Saudi Fund for Development.
“The operation showed the CEL’s vision not only includes traditional hydroelectric generation, but also renewable diversification, which is aligned with market expectations and can attract partners or additional financing in clean energy,” Álvarez says.
Comisión Ejecutiva Hidroeléctrica del Río Lempa (CEL) Inaugural $580 million 8.650% senior unsecured notes due 2033
Sole Bookrunner: BofA Securities
Counsel to Issuer: Arnold & Porter; Consortium Legal
Counsel to Bookrunner: BLP; Clifford Chance