Paraguay places US$500.6 million worth of bonds on the international market

RIO DE JANEIRO, BRAZIL – Hughes Hubbard & Reed – United States (Miami and New York) and Parquet & Asociados Abogados (Asunción) represented Paraguay’s Ministry of Finance in a US$500.6 million bond issue.

The country placed government bonds maturing in 2033 in the international market at an interest rate of 3.849%, the second-lowest ever recorded by the country, while also making an offer to repurchase bonds maturing in 2023 in the amount of US$221 million and 2026 in the amount of US$80 million.

Cleary Gottlieb Steen & Hamilton – United States (New York), Brazil (São Paulo) and Argentina (Buenos Aires) and Estudio Jurídico Gross Brown (Asunción) advised Citigroup Global Markets and Goldman Sachs as initial purchasers in the offering, which settled Jan. 28, and as dealer managers in the cash tender offer, which closed two days earlier.

The bonds are listed on the Euro MTF Market of the Luxembourg Stock Exchange.

In addition to using a portion of the net proceeds from the sale of the bonds to redeem the outstanding bonds accepted in the tender offer, the country will use the remaining proceeds for governmental purposes, including the implementation of measures to promote economic activity and employment and to protect vulnerable sectors in response to the Covid 19 crisis and other issues.

According to Cleary Gottlieb, this transaction has been Paraguay’s second debt management operation since the approval of Law No. 6638/20 in November 2020.

The Ministry of Finance explained that this operation reduces the interest burden, extends the average maturity of debt, and reduces financing risk.

In January 2021, the country placed US$825.9 million in two tranches and repurchased bonds with a coupon of 4.625% and a maturity until 2023.

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