With a 6.5% coupon, the billion-dollar bond will generate $65 million in annual interest expenses, but according to LaGeo’s financial statements, the company only booked $136 million in revenue last year and $36 million in profits. As a result, the added interest payments will make the company very unprofitable. Plus, LaGeo already has $205 million in long-term debt, so the bond would sextuple its leverage. This last-minute change makes little economic sense.
4 Reasons Why Bitcoiners Should Pass on El Salvador’s Bitcoin Bond
