MercadoLibre to repurchase $440 million 2% convertibles due 2028

By Taylor Fox

New York, Jan. 7 – MercadoLibre, Inc. entered into privately negotiated transactions to repurchase $440 million of its outstanding 2% convertible senior notes due 2028, according to a news release.

The closing of the transactions, which is anticipated to occur over a period ending on Jan. 26, is conditioned upon the pricing of MercadoLibre’s offering for cash of guaranteed senior notes.

Following such closing, $440 million principal amount of the convertible notes will remain outstanding.

The repurchase price payable by MercadoLibre will be based in part on the volume-weighted average price of MercadoLibre common stock during a price determination period following execution of the repurchase agreements.

MercadoLibre anticipates that holders of the outstanding convertible notes that it is repurchasing will unwind their related hedge positions by buying MercadoLibre common stock during the price determination period. This activity could increase (or reduce the size of any decrease in) the market price of MercadoLibre's common stock during that period.

MercadoLibre previously entered into capped call transactions with certain financial institutions in connection with the convertible notes. All of these transactions are expected to remain in effect notwithstanding the retirement of the repurchased convertible notes.

MercadoLibre is a Buenos Aires-based e-commerce and payment company.

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