Uruguay repurchases two series of notes
June 26, 2020
Sovereign issuer uses the proceeds from a $1.5 bln debt sale to buy back peso-denominated notes due in 2027 and 2028
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Uruguay said Thursday that it agreed to repurchase UYU9.2 billion ($218 million) in peso-denominated notes, using the proceeds from a two-part debt deal this week.
The sovereign issuer accepted UYU2.22 billion in 4.25% 2027 bonds and UYU6.98 billion in 4.375% 2028 bonds, but it did not accept any 4% 2030 bonds for repurchase, it said in a press release.
According to the terms of the buyback, Uruguay offered to pay UYU1,040 for every UYU1,000 in 2027 notes and UYU1,056.23 for every UYU1,000 in 2028s. Bondholders tendered UYU2.22 billion in 2027 notes, UYU14.6 billion in 2028s and UYU5.18 billion in 2030s, the government said in the press release.
Uruguay will still have UYU9.91 billion in 2027s, UYU32.8 billion in 2028s and UYU14.7 billion in 2030s after it settles the deal on July 1.
On Wednesday, the country raised roughly $1.5 billion in fresh debt by issuing UYU47.1 billion in inflation-linked, 20-year notes and adding $400 million to its 4.375% 2031 bonds. The new 2040 notes priced at par to yield 3.875%, while the tap on the 2031 notes priced at 115.895 to yield 2.481%, or 180 basis points over US Treasury notes, after total orders reached $6.1 billion, according to the Ministry of Economy and Finance.
"Uruguay was cautious and waited until the interest rates in the international markets were more favorable to carry out the transaction," Minister of Economy and Finance Azucena Arbeleche said in a statement.
"The wait allowed the world to see how Uruguay has handled the epidemic, both in healthcare and the economy," she added. "The decision not to go into quarantine has been reflected in economic terms."
Uruguay's Public Debt Coordination Committee said in early May that the government was "looking for a cost-efficient window of opportunity" to sell bonds in international markets this year. In April, the country signed a three-year memorandum of understanding with the Japan Bank for International Cooperation (JBIC) to work together on the sale of yen-denominated bonds.