Political Risk Latin America Blog @PolRiskLatam

Uruguay closer to investment grade

Posted in News and Articles, Political Risk by politicalrisklatam on June 1, 2011

by Jude Webber for Financial Times – Beyond Brics, June 1st, 2011.

As Uruguay moves towards coveted investment grade, it has notched up another success – a clamorous return to the Samurai bond market in Japan, its first such issue since 2007. The issue, which raised just shy of $500m and wraps up this year’s financing needs, was 2.2 times subscribed, says Benito Berber, an analyst at Nomura, which co-managed the sale.

The 2021 bond priced at par with a coupon of 1.64 per cent, yielding Yen Libor plus 43 basis points – at the tight end of the 42-48 basis point guidance range.

This issue was guaranteed by Japan’s JBIC development bank – a requirement Uruguay hopes to shed in future issues. This bond was bought by city and public banks, insurance companies, and regional banks and was managed by Daiwa as well as Nomura.

Azucena Arbeleche, head of debt management at the finance ministry in Montevideo, sees Uruguay now scouting for opportunities to manage liability and a swap of dollar-denominated debt into local currency instruments. (continue reading… )

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