Latvia accepts $551.93 million 2¾% notes, $98.51 million 5¼% notes

By Angela McDaniels

Tacoma, Wash., Dec. 8 – The 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 accepted for purchase $650,441,000 of the tendered notes, or $551,931,000 of the 2¾% notes and $98.51 million of the 5¼% notes, according to a notice.

For the 2¾% notes, the republic accepted all notes tendered non-competitively and did not accept any notes tendered competitively.

For the 5¼% notes, the republic accepted all notes tendered non-competitively, all notes tendered competitively at a purchase spread of 79 basis points and no notes tendered competitively at a purchase spread of less than 79 bps.

As previously reported, Latvia offered to purchase up to $525 million of the two note series. The tender offer began on Nov. 30 and ended at 11 a.m. ET on Dec. 7. The settlement date is expected to be Dec. 23.

The purchase price is 102.261% of par for the 2¾% notes and 114.256% of par for the 5¼% notes plus accrued interest in each case.

Pricing was set at 8 a.m. ET on Dec. 8. For each series, the price is 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, and the reference Treasury rate is 1.664%. The clearing spread is 50 bps for the 2¾% notes for a purchase yield of 2.164%, and the clearing spread is 79 bps for the 5¼% notes for a purchase yield of 2.454%.

Each clearing spread was determined through a modified Dutch auction procedure. The maximum purchase spread was 50 bps for the 2¾% notes and 80 bps for the 5¼% notes.

The offer is subject to a financing condition. Latvia sold $550 million of 0.5% five-year notes (A3/A-/A-) at 99.843 to yield mid-swaps plus 28 bps on Tuesday, a market source said.

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

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