Mercado Libre is in search of capital. On Wednesday, the Argentine ecommerce company announced through an official statement the issuance of bonds for a total of 800 million dollars, due in 2028.
Mercado Libre has granted initial buyers a 13-day option to buy up to an additional principal amount of 120 million dollars. The offer is expected to close on August 24, 2018, subject to the usual closing conditions. The company has confirmed that interest will be paid semiannually on February 15 and August 15 of each year at a rate of 2.0% per annum.
“The promissory notes mature on August 15, 2028, unless they are repurchased before, redeemed or converted in accordance with their terms,” the statement said, adding that Mercado Libre will have the possibility of repurchasing them five years after issuance.
In this regard, Sean Summers, Vice President of Marketplace of the Argentine giant has told Reuters that the company will invest in Argentina, Brazil and Mexico part of the 800 million dollars of funds raised in this debt issue.
According to Summers, part of the funds will be used for the repurchase of a bond issued in 2014 for US $ 300 million and the rest will be invested in improving free shipping processes, in the construction of more storage and distribution centers and in improving everything related to digital payments.
“This placement of the bond is a vote of confidence in the company, in the industry and also in the region, which despite the macroeconomic swings that exist in the different countries of the region, there was a lot of appetite for the bond,” he added.
Almost 20 years since its founding, Mercado Libre is the most important ecommerce company in Latin America with a presence in 19 countries in the region and a work network of over 6100 employees.
According to its latest results report, the net income of the Argentine giant reached from April to June an amount of 335.4 million dollars, which represents a year-on-year increase of 18.1% in dollars and 43.7% in terms of neutral currencies.