Manuel Silva

Cleary counsels Paraguay on $500m bond issue

Cleary Gottlieb has counselled the Republic of Paraguay (Paraguay) on its issuance of $500m 6.000% bonds due 2036 and PYG 3.64bn 7.900% due 2031.

The offering was launched on 26 January, priced on 5 February and is expected to close on 9 February. This transaction was the first guarani-denominated Paraguayan debt offering in the international capital markets, establishing a benchmark interest rate for Paraguayan companies to follow.

The bond offering was conducted simultaneously with a cash tender offer for certain outstanding Paraguayan bonds maturing in 2026, which was launched on 5 February and is expected to mature on 9 February and settle on 15 February. This transaction also constituted Paraguay’s fourth liability management exercise since the enactment of Law No. 6638/20 in November 2020.

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

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

Cleary’s team included partner Manuel Silva (pictured), associate Ignacio Lagos, international lawyer Juan Ignacio Leguízamo, and law clerk Josefina Griot. Partner Matthew Brigham, associate Adriana De Bartolo, and law clerk Adam Girts advised on tax matters. All lawyers are based in New York.

L Giselle Estrada