He Ministry of Economy and Finance (MEF) announced that it will reopen this Tuesday April 18 a tender of the Treasury Note in Pension Units (UP) for more than 1,778 millions of pesos and with a 24-year term and maturity in September 2047, according to the domestic debt issuance schedule for the first half of 2023.
In the last government tender, they were awarded 1,248 million pesos in a Treasury Note in Indexed Units (UI), 8.75% more than what was offered in the initial amount.
However, in the previous one, 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. It remains to be seen how this new auction will go, where the State will once again seek funding through domestic debt instruments.
The conditions of the Treasury Note in UP to 2047
The amount to bid on the Treasury Note series 5 in UP is from 1.2 billion PU. That is, some 1,778 million pesos; 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 38,583 million UP –57,183 million pesos–according to Public Debt Management Unit (UGD).
Among the conditions, the UGD established 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.
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).
Source: Ambito
