EM LATAM CREDIT: Uruguay: Tap 5.442% 2037

(URUGUA; Baa1/BBB+/BBB)

IPT 10Y: N/A FV 10Y: T+73bp

• Republic of Uruguay proposed tapping outstanding USD benchmark-size 2037 amortizing notes. The use of proceeds could be to refinance short-term local debt as well as tender for outstanding global UYU bonds.

• URUGUA Feb. 2037 USD amortizing notes WAL 10.3-year were quoted T+73bp and we would expect a small new issue concession.

• We observe URUGUA 37s quoted 7bp through Chile (CHILE; A2/A/A-) 37s which is consistent with when the bonds priced in February 2025 at 6bp through. Fundamentally, Chile appears to be a lot stronger.

• Uruguay’s gross debt to GDP was expected to be 67% in 2025 vs 43% for Chile according to the IMF. GDP expectations were similar at 2.5% while inflation for Uruguay was forecasted to be a bit higher at 4.7% vs 4.3% for Chile. The fiscal deficit for Uruguay was expected to increase to 4.1% from 3.2% in 2024 relative to Chile’s fiscal deficit expected to be 2.1% for 2025.

• Republic of Peru (PERU; Baa1/BBB-/BBB) has 2037 amortizing notes WAL 10.4 years quoted at G-spread of 95bp, so 24bp wider than URUGUA 37s in credit spread. Peru’s metrics appear much better than Uruguay with a gross debt/GDP ratio expected to be 32% for 2025 according to the IMF while GDP was forecasted to be 2.9% and 1.7% for CPI. Peru has experienced a lot more political instability with six Presidents in the past five years.

• We alerted back in July to the possibility of a Uruguay large new issuance later in the year to fund the country’s fiscal deficit: https://mni.marketnews.com/4qiOVdJ

• We posted this past Friday the Uruguay Finance Minister comments about a potential new issuance in the next few days: https://mni.marketnews.com/48ExNs