Uruguay Launches Tender Offer

Uruguay has launched an exchange offer targeting its $1.23bn outstanding in 5.0% inflation-linked 2018 bonds and several series of expensive USD and EUR denominated notes. The sovereign is offering to swap new 4.375% 2028s for the 2018s, and is making a cash offer to holders of 12 series of USD bonds and 3 series of EUR-dominated bonds, spending up to $1.0bn total. In the exchange offer, the sovereign is offering holders UYP110.25 in new 2028s per UYP100 principal of the 2018s. It is offering a cash payment of $1,085.00- $1,392.50 per $1,000 principal, depending on the series, to holders of the 12 outstanding USD series due 2013-2036 and with coupons of 6.875%-9.250%. Holders of 3 series of EUR bonds due 2012-2019 paying 6.875%-7.00% are being offered EUR1,026.25-EUR1,140.00 cash, depending on the series. The exchange offer expires Friday. The sovereign Monday sold UYP19.906bn ($1bn) in inflation-linked 2028 bonds to fund the cash tender and for other budget purposes, as it moves to de-dollarize its curve, extend duration and provide liquidity to its existing bonds. The sovereign priced the bonds at par with a 4.375% coupon. Citi and HSBC managed the sale, rated Ba1/BB+.