Honduras Borrowed $746m at Home in Six Months. It Wants $607m More
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Key Facts
—The issue. Honduras placed L19,679m (about $746m) of domestic bonds in the first half of 2026, against a target of L20,000m.
—The climb. The same half-year raised L2,947.6m in 2024 and L9,653.6m in 2025, so issuance has risen nearly sevenfold in two years.
—The tilt. Domestic bonds now make up 49.91% of all public debt, up from 47.12% at the end of 2021.
—The ceiling. The approved internal-debt limit rose from L27,599.6m to L30,985.1m in a reformulated budget sent to Congress.
—The next one. The finance minister announced on Friday a further issue of up to L16,000m (about $607m), largely to pay power generators.
—The hole. The state power company ENEE loses roughly $600m a year, by the government’s own account.
Honduras domestic bonds raised about $746m in the first six months of this year. On Friday the finance minister announced another issue worth roughly what the state power company loses each year.
The finance ministry placed L19,679m between January and June. That is 98 percent of what it had planned to raise.
Selling bonds at home is now the government’s second source of budget financing. It is also the fastest-growing one.
A word on the dollar figures here. The ministry publishes the same debt in both currencies, and the pair implies a rate of about 26 lempiras to the dollar.
That rate is what every conversion below rests on.
How Honduras domestic bonds took over the borrowing
The trajectory is steep. In the first half of 2024 the state raised L2,947.6m, and in the same months of 2025 it raised L9,653.6m.
On our own arithmetic, this year’s half-year is nearly seven times the 2024 figure. It also exceeds all of 2023, when domestic issuance came to a little over L10,000m.
The shift shows up in the shape of the debt. According to the Honduran daily El Heraldo, government securities were 47 percent of the public debt at the end of 2021 and are now just under half.
Total public debt rose by about $2.9bn over that period. Domestic bonds accounted for roughly two thirds of the increase.
External borrowing has kept growing too. But the balance has tipped toward domestic lenders.
The ceiling that moved
The original 2026 budget authorised L27,599.6m of new internal debt. A reformulated budget sent to Congress raised that to nearly L31,000m.
That is an increase of about 12 percent, on our own calculation, agreed before the year was half over. Against the original limit, the first six months had already used 71 percent of the year’s allowance.
The state is paying between 9 and 12 percent in lempiras for this money, judging by recent auctions. A ten-year bond went at nearly 12 percent in April.
Debt service in the 2026 budget comes to L69,000m, about $2.5bn. Set against projected tax revenue, that is more than a third of everything the state collects.
Tax exemptions are budgeted at a further L90,000m. The ministry has itself pointed out that exemptions and debt service together come close to the entire tax take.
On our own arithmetic, the two lines equal about 86 percent of projected tax revenue. Tax covers roughly two thirds of central-government spending, and borrowing fills much of the rest.
What Friday’s announcement is really for
The finance minister, Emilio Hernández Hércules, said on Friday that a further bond issue would not exceed L16,000m. A large part of it goes to pay accumulated debts owed to electricity generators.
That is about $607m at the implied exchange rate. The state power company loses on the order of $600m a year, by the government’s own reckoning.
He was direct about the limits of the energy reforms before Congress. Approving the decree does not guarantee ENEE’s rescue and will not reduce its losses, he said, calling it merely one piece of a tremendous puzzle.
The ministry is also putting the presidential aircraft up for sale, through an open process involving several state bodies. Separately, the minister acknowledged that the state agricultural bank carries arrears near 48 percent, despite repeated capital injections.
Why the Fund is watching
The International Monetary Fund released about $242m to Honduras in late June. It had to grant a waiver first, because the country missed a target tied to the domestic debts of that same power company.
A bill to split ENEE into separate generation, transmission and distribution arms stalled in Congress in mid-June for want of votes. Washington, the World Bank and the regional development lenders have all endorsed the split.
President Nasry Asfura took office in January and inherited this budget, drawn up under his predecessor Xiomara Castro. The borrowing plan was already written when he arrived.
Are Honduras domestic bonds a warning sign?
Not on their own. Borrowing at home avoids currency risk and the country keeps the Fund’s backing, but the pace of issuance and the rates paid are the numbers to keep watching.
Does the new issue breach the borrowing limit?
Unclear from the public record. The L16,000m announced on Friday would take total issuance above the raised ceiling, but the minister presents it as covering energy obligations rather than general budget financing.
Who buys these bonds?
Domestic financial institutions. At one auction in March the buyers were commercial and development banks, savings and loan associations, credit unions, insurance companies and the state development bank.
Frequently Asked Questions
How much did Honduras raise through domestic bonds in the first half of 2026, and how does that compare to previous years?
Honduras raised about L19,679m (about $746m) in domestic bonds in the first half of 2026. That was 98% of its L20,000m target. It is a sharp rise from L2,947.6m in the same period of 2024 and L9,653.6m in 2025, so issuance has grown nearly sevenfold in two years.
What share of Honduras's total public debt is now made up of domestic bonds?
Domestic bonds now account for 49.91% of all Honduran public debt, up from 47.12% at the end of 2021. This makes domestic bond issuance the government's second-largest source of budget financing and its fastest-growing one.
Why is Honduras planning an additional bond issuance of up to L16,000m, and what financial problem does it highlight?
The finance minister announced a further bond issue of up to L16,000m (about $607m), largely intended to pay power generators. This is tied to the losses of the state power company ENEE, which the government itself says loses roughly $600m per year.
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