Uruguay Works it Out
Uruguay has wasted no time shoring up its debt profile since restructuring in 2003. Its groundbreaking October exchange paves the way for further credit improvements.
Uruguay's rebound from financial ruin has been spectacular.
It may have paid up slightly to sort out a messy yield curve,
but a $1.2 billion exchange wrapped up in October set the debt
load on a more sustainable footing while also advancing the
goal of de-dollarizing the sovereign's obligations.
The transaction was a sequel to a 2003 debt exchange that dug
Uruguay out of its initial hole, with the aim of getting the
country on more sustainable footing. "We were able to extend
the maturity of our debt and also to dissipate the roll over
risk," says Carlos Steneri, head of Uruguay's debt management
unit. The new government had the transaction in mind since
taking office in March 2005. Between then and the second
exchange, it was busy taking advantage of strong markets to
raise cash to pay down more expensive debt. This included some
$850 million in...
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