From its annual report to the SEC, everything seems to indicate that Uruguay will place debt in national currency and at a fixed rate.
As of the update of its annual report 18-K before the United States Securities and Exchange Commission (SEC)everything seems to indicate that the Ministry of Economy and Finance (MEF) is preparing the ground to issue, at least, a new Global Bond in nominal pesos in the international market.
In its latest quarterly report, the Debt Management Unit (UGD) of the MEF had already anticipated a possible placement of debt through Global Bonds in national currency, in line with its strategy of increasing peso funding from international marketswhile secondary markets develop.
It seems imminent on the part of the MEF the announcement of the issuance of this bond in nominal pesos at a fixed rate, with intermediate maturity and probably 10 years (2033). According to the economist aldo mottothe 2031 Global Bond of Uruguay in pesos at a fixed rate “could be a reference for the new issue”, with a yield to maturity of 9.5%.
Speculation with an issue of one or more bonds in nominal pesos has been considered for some weeks by some local economic analysts and could be warmly received by the market.
Uruguay seeks to pesify its public debt
On the other hand, the International Monetary Fund (IMF) He urged Uruguay to increase the placement of debt in pesos to the detriment of commitments in dollars as a debt management strategy, given the high percentage of the latter.
According to the last quarterly report of the UGD, the State seeks “increase the share of public sector debt denominated in local currency”based on the search for “favorable” market opportunities to be able to “convert dollar-denominated loans with multilateral organizations at a fixed rate and in local currency indexed to the Consumer Price Index (CPI)“.
According to Lema, the issuance of a new Global Bond in pesos “would include the management of liabilities”, as announced by the UGD, with an exchange of short bonds in dollars and Indexed Units (UI).
Source: Ambito
