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Friday, March 31, 2023

The government placed $3.7 billion in a Treasury Note in Pension Units

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In the latest broadcasts of the Public Debt Management Unit (UGD) the demand for the instruments linked to the Uruguayan pesos, Indexed Units (IU) and UP it widely exceeded the government’s offer, in a context where the dollar price has been falling steadily for more than a year.

The conditions of the Treasury Note in UP to 2047

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Among the conditions, the Series 5 Treasury Note has a 2% annual coupon. In turn, the interest payment be biannualevery March 1 and September 1, until September 1, 2047, expiration date. The amortizationFor its part, it will be in three consecutive annual payments in the last three years of the term, on September 1, 2045, 2046 and 2047.

All local investors authorized by the Central Bank of Uruguay (BCU) were able to present their offers in this tender. Non-resident investors, for their part, could do so through a local bank or broker, or through Global Depositary Notes (tradeable on Euroclear, Clearstream and DTC), if available.

According to the UGD, “the tender will be structured as an auction of only pricewhich means that all accepted offers” were awarded “at the same price” and “the minimum amount of each offer will be PU 100,000in multiples of UP 10,000”.

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In turn, Treasury Notes were accepted as a means of payment 26 series (UI), 27 series (UI), Series 13 (UI) and Series 1 (UP).

The government will need $4.21 billion in financing this year

The government will need 4.210 million dollars to be financed during 2023 according to the latest Sovereign Debt Report quarterly of the UGD. The figure includes some 2,222 million dollars, approximately, in amortizations of bonds and loans with multilateral organizations.

Another of the points indicated in the report by the Debt Management Unit is the liquidity from the government: at the end of January, the figure reached 1,874 million dollars, while financing through multilateral institutions amounted to 1,515 million dollars.

The report also establishes the guidelines that the government will follow during this year regarding its debt strategy. In this sense, one of the main pillars will be the increase in funding in local currency in local and international markets, while developing secondary markets.

Based on this, the MEF announced the debt issuance schedule, in which the offering of Treasury bonds at a nominal fixed rate for a base amount equivalent to 500 million dollars during the first semester stands out. The objective is to increase the share of public sector debt in local currency, for which the conversion of loans in dollars will also be sought.

Source: Ambito

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