El Salvador’s $1 Billion Innovative Offering Wins ‘Latin America Bond of the Year’ at 2024 IFR Awards

El Salvador’s first-of-its-kind offering of $1 billion in aggregate principal amount of its 9.25% Notes due 2030 (2030 Notes) and $1 billion in reference notional amount of Macro Variable Interest Only Step-Up Notes (Interest Only Notes), on which Arnold & Porter advised the Republic, won ‘Latin America Bond of the Year’ at the 2024 International Financing Review (IFR) Awards. The annual awards ceremony, held on March 17, 2025, celebrated outstanding achievements in global capital markets during 2024.

The transaction marked El Salvador’s return to the international capital markets after a four-year hiatus. It was coupled with a simultaneous tender offer for El Salvador’s outstanding 5.875% Notes due 2025, 6.375% Notes due 2027, and 8.625% Notes due 2029. In particular, the offering included a unique feature which provides for an increase or decrease in the interest rate on the Interest Only Notes, depending on whether El Salvador has reached an agreement with the International Monetary Fund for a Stand-by Arrangement or Extended Fund Facility or met a minimum ratings trigger. The offering of the 2030 Notes and the Interest Only Notes closed on April 17, 2024, and the tender offer closed on April 19, 2024.

Approximately half of the proceeds of the offering were used to repurchase notes tendered by holders in the tender offer. The remaining proceeds will be used to repay external indebtedness and other obligations of El Salvador’s Ministry of Finance. The offering was conducted under exemptions from the U.S. Securities and Exchange Commission’s registration requirements laid out in Rule 144A for sales to qualified institutional buyers and Regulation S for sales outside the U.S. The 2030 Notes and Interest Only Notes will be listed on the Luxembourg Stock Exchange.

The Arnold & Porter team was led by partner Whitney Debevoise and counsel Arturo Caraballo, and included partner Simon Firth, senior associates Valentina Garzon and Mateo Morris, and associate Stacey Menjivar on sovereign finance issues; partners David Sausen and Reuven Graber and associate Lauren Hoepfner on tax issues; and senior associate Trevor Schmitt on export controls and sanctions issues.