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Friday, March 31, 2023

The government will tender a Note in Social Security Units for $1,600 million

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According to the domestic debt issuance calendar for the first half of 2023, the Ministry of Economy and Finance (MEF) announced that it will reopen this Tuesday March 21 a tender of the Treasury Note in Pension Units (UP) by almost 1,600 millions of pesos and with a term of 17 years and maturity in May 2040.

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In the last broadcast of the Public Debt Management Unit (UGD) the government awarded 326 million pesos in a title in Indexed Units (UI), although it was barely more than a quarter of the amount tendered. The government’s offer had been 200 million UI, but finally the placement was for 57.4 million UI.

It remains to be seen if with this instrument in UI the adjudication is also below what was offered or if it returns to the placements that doubled or tripled the initial proposal at the beginning of the year.

The conditions of the Treasury Note in UP to 2040

The amount to bid on the Treasury Note series 3 in UP is from 1.1 billion PU. That is, some 1,596 million pesos; although, taking into account the high demand in previous public placements, and the flexibility with which the State can extend the award, an even higher number could be expected after the process.

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Among the conditions, the UGD established a 2.2% pa coupon. In turn, the interest payment be biannualevery May 13 and November 13, until November 13, 2040, expiration date. The amortizationFor its part, it will be in three consecutive annual payments in the last three years of the term, on May 13, 2038, 2039 and 2040.

Bidding will close at 2:30 p.m. of this Tuesday –Montevideo time– and the settlement will be the following business day, that is, Wednesday.

All local investors authorized by the Central Bank of Uruguay (BCU) may present their offers in this tender. Non-resident investors, for their part, may 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 will be awarded at the same price” and “the minimum amount of each offer will be PU 100,000in multiples of UP 10,000”.

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

The yield on public debt in Indexed Units fell 6% in February

The last Monthly Bulletin of the Electronic Stock Exchange of Uruguay (Bevsa) reported that in February, the performance index of Uruguayan sovereign securities in indexed units (INDUI) began the month of February at 303.87 basic points and closed below 285.87 basic points.

Meanwhile, the decline for these financial instruments last month was 5.92%.

Source: Ambito

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