Paraguay issued $600 million in bonds and PYG 4.74 trillion, marking its first international debt offering since gaining investment grade. The offering processed from February 18 to March 4, 2025, alongside a cash tender for existing bonds. Proceeds will fund both bond repurchases and general government use.
On March 7, 2025, Cleary Gottlieb announced it represented the Republic of Paraguay in a significant financial transaction, involving a $600 million issuance of 6.65% bonds due in 2055 and PYG 4.74 trillion in 8.5% bonds due in 2035. This marked Paraguay’s inaugural debt offering in the international capital markets following its upgrade to investment grade in July 2024.
The issuance process began on February 18, 2025, with pricing occurring on February 25, 2025, and closing on March 4, 2025. This bond offering was executed concurrently with a cash tender offer, targeting certain existing bonds due in 2026 and 2027.
The tender offer also commenced on February 18, 2025, and closed on February 24, 2025, with settlement following on March 4, 2025. Citigroup Global Markets Inc. and Itau BBA USA Securities Inc. played vital roles as initial purchasers for the bonds and joint dealer managers for the tender offer.
Paraguay allocated a portion of the proceeds from the bond sale to fulfill the purchase price for bonds that were accepted in the tender offer, while the remaining funds are designated for general governmental expenses and initiatives.
This bond issuance is pivotal for Paraguay, representing its first venture into international debt financing after achieving investment grade status. The dual strategy of launching a tender offer alongside the bond issuance enhances fiscal management by refinancing existing obligations and securing funds for governmental purposes.
Original Source: www.clearygottlieb.com
