New El Salvador Bond Not Imminent: Nomura

An $800m international bond platform from El Salvador now being debated in its government is unlikely to lead to imminent issuance, Nomura says in a report. The president is lobbying congress to approve the issuance, in order to have it in place should investors exercise a put option on El Salvador’s 2023 bonds in January. The shop considers the exercise of the option “low-probability.” The issuance could also be used to retire shorter-term local debt. Even if the congress quickly authorizes the debt issuance, which is unclear at this point, the sovereign is unlikely to quickly come to market. “We expect them to do so towards the end of the year, as they seem unwilling to issue the Eurobonds too much in advance of the January 2013 event,” Nomura says.