Uruguay to Upsize 2028 in Tender’s Wake

Uruguay will bring its new 2028 bond issue to $2.0bn outstanding, upon completion of an exchange offer and a $275m-equivalent retap that was part of liability management operation to replace expensive peso, euro, and dollar debt with a new peso inflation-linked benchmark. The sovereign is set to pay UYP14.42bn ($725m) in new 2028 bonds to holders of existing 5.0% inflation-linked 2018 bonds that accepted a tender offer closed Friday. The sovereign had offered the new 2028s at a rate of UYP110.25 in new 2028s per UYP100 principal of the 2018s. This operation follows the sale of UYP19.906bn ($1bn) of the 4.375% 2028s for cash on December 5. After seeing strong demand in that original sale, the sovereign reopened $275m in 2028 bonds for cash Monday, bringing the total outstanding 2028s to UYP39.79bn, or the $2bn-equivalent ceiling it had set for itself. In a final part of the liability management operation, Uruguay will spend EUR138.2m ($182m) to buy back old euro-denominated bonds due 2012-2019 that pay between 6.875%-7.000%, and $407.6m to buy back old dollar-denominated bonds due 2013-2017 that pay between 7.000%-9.250%. The sovereign will pay various prices in a tender also closed Friday. The dollar and euro buybacks will be funded using cash from the 2028 sale. Citi and HSBC managed both the exchange offer and the new issue. The 2028s are rated Ba1/BB+.