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 seven hundred and forty-six million dollars in the first six months of this year, and on Friday the finance minister announced another issue worth roughly what the state power company loses annually.

The finance ministry placed nineteen thousand six hundred and seventy-nine million lempiras between January and June. That is ninety-eight 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 finance ministry publishes the same debt stock in both currencies, and the pair implies a rate of about twenty-six lempiras to the dollar, which 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 two thousand nine hundred and forty-eight million lempiras, and in the same months of 2025 it raised nine thousand six hundred and fifty-four million.

On our own arithmetic this year’s half-year is nearly seven times the 2024 figure. It also exceeds the entire twelve months of 2023, when domestic issuance came to a little over ten thousand million lempiras.

The shift shows up in the shape of the debt. According to the Honduran daily El Heraldo, government securities were forty-seven percent of the public debt stock at the end of 2021 and are now just under half of it.

Total public debt rose by about two thousand nine hundred million dollars over that period, and 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 twenty-seven thousand six hundred million lempiras of new internal debt. A reformulated budget sent to Congress raised that to nearly thirty-one thousand million.

That is an increase of about twelve percent, on our own calculation, agreed before the fiscal year was half over. Against the original limit, the first six months had already used seventy-one percent of the year’s allowance.

The state is paying between nine and twelve percent in lempiras for this money, judging by recent auctions. A ten-year bond went at nearly twelve percent in April.

Debt service in the 2026 budget comes to sixty-nine thousand million lempiras, about two and a half billion dollars. Set against projected tax revenue, that is more than a third of everything the state collects.

Tax exemptions are budgeted at a further ninety thousand million lempiras. The finance 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 eighty-six 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 sixteen thousand million lempiras. A large part of it goes to pay accumulated debts owed to electricity generators.

That is about six hundred and seven million dollars at the implied exchange rate. The state power company loses on the order of six hundred million dollars 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 forty-eight percent, despite repeated capital injections.

Why the Fund is watching

The International Monetary Fund released about two hundred and forty-two million dollars 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, which was 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 retains the Fund’s backing, but the pace of issuance and the interest rates paid are the numbers to keep watching.

Does the new issue breach the borrowing limit?

Unclear from the public record. The sixteen thousand million lempiras announced on Friday would take total issuance above the raised ceiling, but the minister presents it as covering energy-sector 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.