MercadoLibre Inc. fell 3.13% intraday as it returned to global debt markets for only the third time, offering dollar notes maturing in 2036 at an initial spread of about 160 basis points over comparable Treasuries, with proceeds going to general corporate purposes. The company's existing 2033 notes were quoted around 5.7% on Tuesday. Fitch and S&P have rated the new notes BBB-, and Moody's at Baa3, the lowest investment-grade level at all three agencies. Moody's cited operating performance, the company's leading position in Latin American e-commerce, and solid liquidity as support, but balanced that against lower profitability due to accelerated investment in logistics, customer acquisition, and its credit business, as well as funding and asset-quality risks from rapid fintech growth. Second-quarter revenue rose 50% from a year earlier to $10.2 billion, marking the 30th consecutive quarter of sales growth above 30%. This is MercadoLibre's first sale since December, handled by Allen & Company, BofA Securities, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley, and Santander.
MercadoLibre Inc.Debt offering for general purposes may dilute or signal funding needs, while Moody's cites lower profitability and risks from fintech growth.
