UPDATE 2-Uruguay sells $500 mln in new bond, plans swap, buyback

Tue Nov 13, 2012 6:10pm EST

Related Topics

* Sells new 2045 global bond

* Will use proceeds for buyback

* Seeks to issue more 2045 bonds for debt exchange

By Felipe Llambias and Malena Castaldi

MONTEVIDEO, Nov 13 (Reuters) - Uruguay sold $500 million in a new 2045 global bond at a yield of 4.125 percent, as part of a debt liability operation that includes a swap for shorter-dated paper and cash buybacks, the government said on Tuesday.

Uruguay could issue up to $1.5 billion more in the 2045 paper to swap for dollar-denominated bonds maturing from 2013 to 2036. Up to $5 billion in these bonds are eligible for the exchange, although the government said it will give priority to debt maturing by 2027.

It will also use the proceeds from Tuesday's debt sale to finance an up to $500 million cash buyback targeting dollar- and euro-denominated bonds maturing from 2013 to 2027.

"The benefit in this case is dual: we are extending the maturities and creating a 30-year benchmark bond, which is a milestone," Economy and Finance Minister Fernando Lorenzo told reporters.

Bondholders' offers to tender their bonds in the debt swap or for cash will be accepted through Friday. The government will announce the results of the swap and buyback on Monday.

"We'll only be able to evaluate this operation once its three parts have concluded, which will happen Friday night," Lorenzo said.

A pensions fund executive based in Montevideo said he believed there would be demand, especially from abroad.

"For the local market the primary debt issue is more attractive than the swap," he said on condition of anonymity.

Uruguay has been moving away from dollar-denominated debt to reduce its exposure to currency risk. Local peso bonds now account for more than half the Treasury's debt, up from 11 percent in 2004.

The country last issued global bonds in December 2011, when it sold $1 billion worth of 2028 bonds denominated in inflation-indexed units.

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Comments (1)
garygp40 wrote:
Uruguay is a careful financial home for people worried about safety. It is a clean,safe foreigner friendly country.

Nov 14, 2012 2:59am EST  --  Report as abuse
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