Uruguay Announces Intention to Issue a New Global Bond and to Conduct Liability Management Transactions

MONTEVIDEO, Uruguay, Dec. 5, 2011 /PRNewswire/ -- Today, the Republic of Uruguay ("Uruguay") announced its intention to issue a new global bond for cash and to conduct a series of liability management transactions designed to further improve its external debt profile, including an exchange offer and a cash tender offer for certain of its outstanding debt securities, all as described below.

The issuance of new bonds for cash is expected to comprise an offering of UI Global Bonds due 2028 (the "UI 2028 Global Bonds"), which will be used by Uruguay in part to fund the cash tender offer.

In addition, Uruguay intends to invite holders of its 5.00% UI Global Bonds due 2018 (the "UI 2018 Global Bonds"), subject to certain conditions, to tender such bonds in exchange for additional UI 2028 Global Bonds, which, if issued, will be consolidated, form a single series, and be fully fungible with Uruguay's UI 2028 Global Bonds to be offered for cash (the "Exchange Offer").  The aggregate outstanding principal amount of the UI 2018 Global Bonds is Ps.24,274,570,953 (equivalent to approximately U.S.$1.23 billion).  Subject to proration, holders that validly tender UI 2018 Global Bonds are expected to receive, in exchange for each Ps.100 in original principal amount of UI 2018 Global Bonds accepted for exchange, UI 2028 Global Bonds having a nominal principal amount equal to Ps.110.25, as adjusted for inflation and accrued interest.  The aggregate principal amount of the UI 2028 Global Bonds intended to be issued by Uruguay (including UI 2028 Global Bonds offered for cash) will not exceed the equivalent of U.S.$2.0 billion.  Uruguay expects the Exchange Offer will be subject to the consummation of the issuance of the UI 2028 Global Bonds offered for cash.

Uruguay reserves the right, in its sole discretion, not to launch the Exchange Offer or, if the Exchange Offer is launched, not to accept tenders for, or issue, for any reason, UI 2028 Global Bonds.

Uruguay also intends to invite holders of the bonds set forth in the tables below (the "Group A Bonds" and the "Group B Bonds," which are collectively referred to herein as the "Bonds") to tender their Bonds for cash (the "Cash Tender Offer").  The total price payable by Uruguay (excluding interest accrued and unpaid on the Bonds) for all Bonds accepted for purchase by Uruguay pursuant to the Cash Tender Offer, translated, in the case of Bonds denominated in Euros, to U.S. dollars using the mid-market spot rate for converting Euros into U.S. dollars as of 8:00 a.m., New York City time, on the day of the Expiration Deadline, according to the CM1 screen on Bloomberg (the "Aggregate Purchase Price"), will not exceed U.S.$1.0 billion. 

Uruguay expects the Cash Tender Offer to be conditioned upon, among others, the issuance of the UI 2028 Global Bonds expected to be sold today.  Uruguay expects that the Cash Tender will not be conditioned upon any minimum participation in any series of Bonds.  Uruguay intends to reserve the right, in its sole discretion, not to accept any or all offers and to terminate the Cash Tender Offer for any reason in its discretion.  Uruguay will not accept any offers for Group B Bonds unless it has accepted all Group A Bonds validly tendered.

If the Aggregate Purchase Price to be paid for all Group A Bonds validly tendered and accepted for purchase by Uruguay exceeds U.S.$1.0 billion, Uruguay intends to reserve the right, in its sole discretion, to select one or more series of Group A Bonds to be prorated on the basis of the same or different proration factors.  Uruguay also intends to reserve the right, in its sole discretion, to select one or more series of Group B Bonds to be prorated on the basis of the same or different proration factors, and to select which series of Group B Bonds to accept.  The aggregate outstanding principal amount of all Group A Bonds is equivalent to approximately U.S.$1.3 billion and of all Group B Bonds is approximately U.S.$4.8 billion.  Each offer to tender any series of Bonds will be made as a separate, independent offer.

If the Cash Tender Offer is launched, Uruguay expects the price to be paid for Bonds tendered and accepted pursuant to the Cash Tender Offer (the "Purchase Price") will be for each U.S.$1,000 or euro 1,000 of each series of Bonds, the fixed Purchase Price indicated in the table below.

* And multiplied in the case of these bonds only by the amortization factor of 0.20.

Uruguay expects to pay holders any accrued and unpaid interest on their Bonds up to (but excluding) the settlement date.  Uruguay intends to reserve the right to extend or early terminate the Cash Tender Offer.

This announcement is not an offer or a solicitation of offers to exchange or tender any securities.  Any offer will be made solely by documents expected to be prepared in connection with the intended offers described above.  The distribution of materials relating to any offer, and the transactions contemplated by any offer, may be restricted by law in certain jurisdictions.  If materials relating to any offer come into your possession, you are required by Uruguay to inform yourself of and to observe all of these restrictions.  The materials relating to any offer does not constitute, and may not be used in connection with, an offer or solicitation in any place where such offers or solicitations are not permitted by law.

SOURCE Republic of Uruguay

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