He Ministry of Economy and Finance (MEF)through a note signed by the owner of the portfolio Azucena Arbeleche, updated its 18-K annual report this Monday before the United States Securities Commission (SEC).
The new placement of global bonds by Uruguay It was expected news, since since the Debt Management Unit (UGD) They had not ruled out resorting once again to the international market after, in July, they issued a new sovereign bond, 2033, for ten years and in pesos.
The Economist Aldo Lema analyzed that “tactically Uruguay “It takes advantage of the falls in US long rates and the sovereign spread (“country risk”) that occurred during the last week.” According to the latest AFAP Republic monitor, the BIIC 2034 appreciated 2.24% last week, with a return rate of 5.4%.
The BIIC 2034, which is in dollars, has a 5.75% coupon, and final maturity in 2034. Its current currency is 1,499.97 million dollars. The initial price condition is in the area of 120 basis points above what a Treasury bond pays. USA.
How does the Uruguayan sustainable bond, a pioneer of its kind, work?
The Bond Indexed by Climate Indicators (BIIC) 2034 is linked to two goals of sustainable development: the decrease in emission of greenhouse gases and the maintenance of native forests.
If the country meets both indicators, the interest rate of the global bond is maintained, while a penalty is applied if the proposed climate goals are not achieved, which consists of paying a higher rate. As long as Uruguay exceeds the two climate indicators, the country pays a lower interest rate.
Within four years, in October 2027, it will be evaluated how Uruguay is in compliance with the goals proposed when launching the bond last year. Then, it will be defined whether or not the interest rate until maturity (2034) should be modified.
How did Uruguay fare in the last global bond placement?
Last July Ministry of Economy and Finance issued a new global bonus in nominal pesos, with which he once again channeled the good response that traditionally exists in the international marketby placing debt for an equivalent of 1,267 million dollars, with an annual yield to maturity of 9.75%.
The 2033 Global Bond at a fixed rate included a repurchase offer, reported the Debt Management Unit
According to information from the Debt Unit of the MEF, the bond was issued for about $1 billion in “new” placement, which implies double what was initially planned. To that amount are added exchange operations for 267 million dollars.
Source: Ambito
