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 April 11 a tender of the Treasury Note in Indexed Units (UI) by close to 1,145 millions of pesos and with a term of more than 11 years and maturity in August 2034.
In the last government tender, the MEF decided to declare void the tender for a Note in nominal pesos for 800 million pesos since the demand did not cover the amount offered, unlike what has happened in most of the last tenders of this type of State titles, where the basic amount of the bidding was even doubled due to the interest of investors.
The conditions of the Treasury Note in UI to 2034
The amount to bid on the Treasury Note series 9 in UI is 200 million IU. That is, approximately 1,145 million pesos at today’s value; although, considering the flexibility with which the State can extend the award, an even higher figure could be expected after the process.
If the amount offered is materialized, the circulating would amount to 5,578 million UI –31,953 million pesos–according to Public Debt Management Unit (UGD).
Among the conditions, the UGD established a 2.5% annual coupon. In turn, the interest payment be biannualevery August 24 and February 24, until August 24, 2034, expiration date. The amortizationFor its part, it will be in three annual, equal and consecutive payments in the last three years of the term, on August 24, 2032, 2033 and 2034.
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 government declared a tender for a Treasury Note void
In its last tender for a Note –in this case in nominal pesos (UYU)–, the government decided to declare the tender of treasury note Series 10 on March 29, for 800 million pesos (20.7 million dollars, at the value of that time) due to the fact that the demand did not cover the amount offered.
Unlike what has happened in the last NT tenders, where the base amount of the tender was even doubled due to investor interest, on Tuesday the instrument in pesos maturing in February 2029 captured just 611, 79 million pesos offer (USD 15.8 million).
The government proposed itself as a pillar in debt management increase funding in pesos through the placement of bonds in the local and international markets for a total of 3,785 million dollars for all of 2023.
Added to this is an increase in secondary markets (notes mainly linked to the Indexed Units) for a total of 500 million dollars for the first semester.
Source: Ambito
