Uruguay plans to sell $2 billion of bonds overseas as soon as today as borrowing costs for the South American nation fall to the lowest in more than a year, according to a person familiar with the offering.
The country said in a filing to the U.S. Securities and Exchange Commission that it plans to issue debt due in 2050 and that HSBC Holdings Plc and JPMorgan Chase & Co. are managing the sale. Uruguay may sell the securities to yield about 1.65 percentage points over U.S. Treasuries, said the person, who asked not to be identified because the terms aren’t set.
Uruguay, a nation of 3.3 million people wedged between Brazil and Argentina, last sold bonds abroad in August. The country’s average borrowing costs have since fallen 0.6 percentage point to 4.44 percent, the lowest level since May 2013. The planned securities due 2050 will be the nation’s longest-dated bonds.
Uruguay will use a portion of the proceeds from the sale to fund a buyback of dollar-denominated debt due in 2015, 2017, 2022, 2025, 2033, 2036 and 2045, according to the filing.
In May, the nation was upgraded to Baa2, the second-lowest investment grade rating, by Moody’s Investors Service, which cited Uruguay’s transition toward more stable annual growth levels and less vulnerability to regional shocks.