January 1, 2013
Last April, Standard & Poor’s lifted Uruguay’s credit rating by one notch – returning the country to investment grade after a decade of its debt being rated as junk.
A great part of its return to form was due to a remarkable dollar-to-peso liability management operation in December 2011 of a size typically reserved for the largest sovereign LatAm issuers.
The operation allowed Uruguay to extend duration, de-dollarize its curve, reduce foreign currency and refinancing risk and provide liquidity to existing bonds. It also set a template for other sovereigns to follow.
“We were able to increase the percentage of local currency, execute at time of volatility [the US had been downgraded and
Republic of Uruguay UYP39.8bn New Issue, Tender & Exchange