Latvia to accept tenders for $650.44 million of 2¾% notes, 5¼% notes

By Susanna Moon

Chicago, Dec. 8 – Republic of Latvia said it received tenders for $802,815,000 of its $1.25 billion of 2¾% notes due 2020 and $500 million of 5¼% notes due 2021.

Latvia expects to accept for purchase $650,441,000 of the tendered notes, which breaks down to $551,931,000 of the 2¾% notes and $98.51 million of the 5¼% notes, according to a notice.

The tender offer ended at 11 a.m. ET on Dec. 7. Latvia began the offer on Nov. 30 to purchase up to $525 million of the two note series.

Pricing was scheduled for 8 a.m. ET on Dec. 8.

The Rule 144A and Regulation S notes will be purchased at a price equal to the sum of the clearing spread and the reference U.S. Treasury rate. The reference security is the 1.625% Treasury due Nov. 30, 2020.

Each clearing spread will be determined through a modified Dutch auction procedure. The maximum purchase spread is 50 basis points for the 2020 notes and 80 bps for the 2021 notes.

The issuer said that, based on the series acceptance amount, it expects to set the 2020 notes clearing spread at the maximum purchase spread of 50 bps and the 2021 notes clearing spread at a purchase spread of 79 bps.

The issuer said it expects to accept for purchase all notes tendered under non-competitive tender instructions for the 2020 notes and the 2021 notes.

For competitive tender bids, none of the 2020 notes will be purchased and only those 2021 notes with competitive tender instructions at a purchase spread of 79 bps will be accepted for purchase.

Holders will also receive accrued interest.

The issuer previously said it may accept notes for purchase on a pro rata basis if the amount of non-competitive tenders exceeds the offer cap. In this case, the clearing spread will be the maximum purchase spread and the issuer will not accept any notes tendered under competitive tender instructions.

If the amount of non-competitive and competitive tenders together exceeds the offer cap, the issuer will accept notes for purchase in the following order: first, all non-competitive tenders; second, all competitive tenders that specify a purchase spread above the clearing spread; and third, notes tendered at the clearing spread on a pro rata basis. In this case, the issuer will not accept any notes tendered for purchase at a spread below the clearing spread.

The offer is subject to a financing condition. The issuer said it intends to issue new euro-denominated fixed-rate notes.

Settlement is slated for Dec. 23.

The issuer said it is making the offers as part of the government’s medium-term debt management.

Barclays Bank plc (London: +44 20 3134 8515, attn.: liability management group, eu.lm@barclays.com; United States: 800 438-3242 or 212 528-7581), Goldman Sachs International (London: +44 20 7774 9862, liabilitymanagement.eu@gs.com; United States: 800 828-3182 or 212 902-5183) and J.P. Morgan Securities plc (London: +44 20 7134 2468, attn.: liability management., em_europe_lm@jpmorgan.com; United States: 866 834-4666 or 212 834-3617) are the dealer managers. D.F. King Ltd. (latvia@dfkingltd.com; London: +44 20 7920 9700; Hong Kong: +852 3953 7320; New York: 212 269-5550 or 866 620-0678) is the information and tender agent.

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