Last updated: 10:26 / Tuesday, 27 October 2015
New Bonds Offering

Uruguay Launches New Bond Offering Due 2027 and a Tender Offer

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Uruguay Launches New Bond Offering Due 2027 and a Tender Offer
  • Uruguay launched its new 2027 maturing US dollar denominated bond, and offered to buy back government bonds maturing at 2017, 2022, 2024 and 2025
  • Uruguay has investment grade ratings of Baa2 / BBB / BBB-
  • The Government of Uruguay sought after external funding prior to the US Federal Reserve decides to raise interest rates

On Monday October 19th, the Government of Uruguay, following the line used by other emerging countries, sought after external funding prior to the US Federal Reserve decides to raise interest rates. Uruguay, which has investment grade ratings of Baa2 / BBB / BBB-, launched a global bond US dollar denominated maturing at 2027, and it also offered to buy back government bonds maturing at 2017, 2022, 2024 and 2025; whose outstanding amount is around 2,800 million dollars, according to Reuters.

Uruguay launched its new 2027 maturing US dollar denominated bonds at a spread of Treasuries plus 245bp, according to one of the lead managers of the transaction. The launch spread is at the tight end of guidance of 250bp area and inside initial price thoughts of 265bp area. The amortizing bond has an average life of around 11 years and is part of a broader liability management operation.

The deal is being done in conjunction with a one-day cash tender for outstanding 9.25% 2017s, 8% 2022s, 4.5% 2024s and 6.875% 2025s, for which Uruguay is offering a purchase price of 114, 127.50, 106.00 and 119, respectively.

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Tender Offer

The new money component of the trade is around US$ 1.2 billion, the lead manager said. Citigroup, HSBC and Itau BBA are the lead managers on the transaction.

 

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