Critics Say El Salvador Could Default on Conventional Debts Before it Even Issues Bitcoin Bonds

cryptonews.com:

Concerns are being voiced that El Salvador could default on bond payments, with international critics claiming that President Nayib Bukele’s “experiment” to grant bitcoin (BTC) legal currency status “has hit a wall.”

El País reported that BTC price drops have thrown the BTC adoption plans into uncertainty, and reported that government bonds are currently “trading at 40% of their original value, as investors start to doubt whether the country can meet its next debt payment.”

The next key date in El Salvador’s diary is January 2023, when some USD 800m worth of bonds is due to mature.

Recent credit rating downgrades could spell more trouble for El Salvador, the report warned, explaining:

“A credit rating of CCC, described as ‘junk’ in the industry, prevents a country from accessing global markets to issue more debt.”

Both Fitch and Moody’s have downgraded to CCC in recent months. Experts have previously stated that the “door is now closed” on a possible International Monetary Fund (IMF) deal – due mainly to BTC adoption policies.

Moody’s recent report claimed that even if the government “finds a way to manage near-term financing pressures from the upcoming 2023 bond maturity,” it claimed that El Salvador “will continue to face funding pressures that would compromise its ability to service its debt commitments in full.”

Bloomberg, meanwhile, claimed that prices on Salvadoran foreign debt have fallen some 18% this year, “leaving bonds due in 10 and 30 years trading at around 40 cents on the dollar, deep into distressed territory.”

In something of a contrast from El País’ claims, it stated that a “22% price discount” was now common for the bonds that expire in January 2023, but added that this “suggests some hesitation from investors