Paraguay in $500 Million and PYG 3.64 Trillion Debt Offering and Concurrent Tender Offer

Cleary Gottlieb represented the Republic of Paraguay (Paraguay) in its issuance of $500 million 6% bonds due 2036 and PYG 3.64 trillion 7.9% bonds due 2031.

This transaction constituted Paraguay’s first Guaraníes-denominated debt offering in the international capital markets, setting a reference interest rate for Paraguayan companies to follow.

The offering launched on January 26, 2024, priced on February 5, 2024, and is expected to close on February 9, 2024.

The bond offering was made concurrent with an offer to purchase for cash certain outstanding bonds of Paraguay due 2026, which launched on February 5, 2024, and is expected to expire on February 9, 2024, and to settle on February 15, 2024. This transaction also constituted the fourth liability management exercise by Paraguay since the enactment of Law No. 6638/20 in November 2020.

Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, and Itau BBA USA Securities Inc. acted as initial purchasers for the bond offering and joint dealer managers for the tender offer.

Paraguay used a portion of the net proceeds of the sale of the bonds to pay the purchase price of outstanding bonds accepted in the offer to purchase. The remaining proceeds will be applied for general government purposes.