#J.P. Morgan #Uruguay #Montevideo #Global Bonds

Uruguay's Recent Tender Offer Results for Global Bonds

On February 7, 2025, the Republic of Uruguay publicly released the results of its cash tender offer for various series of Global Bonds. This financial maneuver aims to manage and optimize the country’s debt, while the specific details reveal a structured approach to bond repurchase.

Overview of the Tender Offer

Uruguay's announcement detailed the execution of a tender offer to acquire its outstanding bonds, known as the Old Bonds. The response period for this tender offer commenced on Thursday, February 6, at 12:00 PM New York time for non-preferred tenders and concluded at 2:00 PM for preferred tenders. The offer was facilitated through J.P. Morgan Securities LLC, designated as the Billing and Delivery Bank.

The maximum amounts targeted for purchase were substantial—$108,136,714 for the 2027 series and $195,496,834 for the 2031 series. The results showed that all preferred tenders for the 2027 series were accepted, as the purchase amount did not exceed the specified cap, eliminating the need for proration. Conversely, the 2031 series experienced excess in preferred tenders, leading to a proration factor of 64.54% applied to those accepted tenders.

Detailed Breakdown

Specifically, the tender offer included:

• - 2027 USD Bonds

- Aggregate Principal Amount of Preferred Tenders: $108,136,714
- Accepted Amount: $108,136,714 (Fully accepted)
- Aggregate Principal Amount of Non-Preferred Tenders: $69,486,819
- Accepted Amount: $0

• - 2031 USD Bonds

- Aggregate Principal Amount of Preferred Tenders: $302,908,029
- Accepted Amount: $195,496,834 (Subject to 64.54% proration)
- Aggregate Principal Amount of Non-Preferred Tenders: $35,327,682
- Accepted Amount: $0

The nominal purchase prices were set at $999.00 for the 2027 USD Bonds and $982.30 for the 2031 USD Bonds, withholders earning accrued interest on their accepted tenders.

Critical Conditions for Acceptance

The announcement went on to highlight the importance for bondholders to deliver their accepted bonds by specific deadlines to ensure their successful acceptance. DTC bondholders, for example, must submit their valid tenders by 3:00 PM on the designated Settlement Date. Late submissions run the risk of having their tenders canceled, which could have further financial implications.

Financial Implications and Future Considerations

This strategic financial move aims to apply proceeds from the new bonds being offered to finance the repurchase of accepted Old Bonds. The settlement date is provisionally set for February 11, 2025, contingent upon approval conditions outlined in the Offer to Purchase. After this date, a smooth settlement will commence, conducted against customary practices within corporate fixed-income markets.

The success of Uruguay's tender offer not only reflects the nation’s approach to debt management but also showcases its ongoing engagement with international investors. The roles played by BBVA Securities, Citigroup Global Markets, along with J.P. Morgan, as Dealer Managers, further solidify confidence in this process. Investors are encouraged to view the Official Offer Website for any individual inquiries regarding the offer and proceedings.

In conclusion, Uruguay’s tender offer results underline an essential shift towards proactive debt management, with implications for bondholders and the national economic landscape. Investors will be closely watching how these strategies unfold in a fluctuating market.