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The government tenders today a Note in Indexed Units for $1,155 million

The government tenders today a Note in Indexed Units for $1,155 million

He Ministry of Economy and Finance (MEF) It will reopen this Tuesday at 2:30 p.m. a tender of the Treasury Note in Indexed Units (UI) for more than 1,155 million pesos and with a term of almost six years and maturity in January 2029, according to the domestic debt issuance schedule for the first half of 2023.

In the last government tender, they were awarded $60.5 million in a Treasury Note in Pension Units (UP), 32% more than what was offered in the initial amount (47.7 million dollars).

This Tuesday’s auction will be a great focus of attention, as it is the first issue of a Treasury Note after the decision of the Central Bank of Uruguay (BCU) to reduce the interest rate by 25 basis points to 11.25%. Therefore, the behavior of the market will be seen in the offer of instruments in pesos or indexed to inflation, such as this one.

At the beginning of February, the MEF decided to declare void the tender for another 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 UI to 2029

The amount to bid on the Treasury Note series 31 in UI is 200 million IU. That is, some 1,155 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 1,653 million IU –9,548 million pesos–according to Public Debt Management Unit (UGD).

Among the conditions, the UGD established a 3.25% annual coupon. In turn, the interest payment be biannualevery July 18 and January 18, until January 18, 2029, expiration date, where the amortizationin one go.

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

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