El Salvador's bitcoin bond reportedly hasn't lured a single investor, and markets are bracing for a default on conventional debt

• El Salvador's $1 billion bitcoin bond hasn't worked as planned, and no investors have bought in.
• Now, El Salvador's conventional bonds due in 2032 yield 24%, a level that suggests markets are bracing for a default.

Investors aren't flocking to El Salvador's bitcoin bond, and in fact, the crypto-backed offering hasn't drawn a single buyer, according to Bloomberg.

Millennial president Nayib Bukele is seeking $1 billion for the crypto-backed bond, though instead of financing he's received skepticism from credit agencies and the International Monetary Fund.

The IMF previously criticized Bukele's call to make bitcoin legal tender, and has called for the government to reconsider its reliance on the cryptocurrency.

Now, El Salvador's conventional bonds due in 2032 yield 24%, a steep level that suggests markets perceive the debt to be high risk and are bracing for a default. Bloomberg data shows that yields on El Salvador's conventional bonds have fallen further than every other nation except those of war-torn Ukraine.

When Bukele first debuted his plan for bitcoin bonds in November, the nation's dollar debt hit an all-time low, Bloomberg reported. In February, Fitch Ratings slashed El Salvador's rating to CCC, pointing to its increased dependence on short-term debt and limited financing sources. However, El Salvador's finance minister recently said there's "zero risk" of a default.

Investors have grown concerned as to whether El Salvador will be able to keep up with its current bond payments, but also its willingness to keep servicing the debt.

In November, Bukele had said half of the $1 billion raised for the bitcoin bond would be used to purchase more bitcoin, while the other half would be used for energy and bitcoin mining infrastructure.