We maintain our Neutral recommendation on MercadoLibre (Baa3/BBB-/BBB-), unchanged from our 2Q26 report, and continue to prefer the MELI 3.125% 2031s. The new 5.850% 2036s improve liquidity and extend the debt profile, but at a 6.139% reoffer yield we do not think the bond offers enough compensation for approximately 7.5 years of duration and a funding-intensive balance sheet. The credit itself remains strong. MercadoLibre continues to deliver rapid operating growth, has demonstrated access to long-term funding and now has better coverage of short-term obligations. The constraint remains valuation relative to cash generation, leverage and the funding requirements of Fintech. The credit portfolio grew 75.2% YoY in 2Q26 against 49.8% consolidated revenue growth, while total debt increased 46.7%. Adjusted FCF was only US$214 million despite US$3.22 billion of free operating cash flow, while gross and net leverage stood at 3.39x and 1.65x. We therefore view the new 2036s as a Hold. The 2031s remain our preferred expression given their $90.3 price and 3.9-year duration, while for accounts seeking longer duration we prefer the new benchmark to the 2033s.
MercadoLibre priced US$1.0 billion of 5.850% senior unsecured notes due September 14, 2036 at $97.864 to yield 6.139%, with an issue spread of 130 bps. Pricing tightened approximately 30 bps from initial price talk around 160 bps, and the company said the transaction attracted more than 100 institutional investors. Settlement is scheduled for September 14. The notes are SEC registered, governed by New York law and guaranteed by six operating subsidiaries across Argentina, Brazil, Chile, Mexico and Colombia. They are callable at a T+20 make-whole spread before June 14, 2036 and at par thereafter. Proceeds are for general corporate purposes.
New Issue Terms
Issuer: MercadoLibre, Inc.
Instrument: Senior unsecured notes
Size: US$1.0 billion
Maturity: September 14, 2036
Coupon: 5.850%, semiannual
Issue Price: $97.864
Reoffer Yield: 6.139%
Issue Spread: 130 bps, from IPT around 160 bps
Duration: approximately 7.5 years, EM Spreads estimate
Expected Ratings: Baa3 / BBB- / BBB-
Settlement: September 14, 2026
Optional Redemption: Make-whole at T+20 before June 14, 2036; par thereafter
Use of Proceeds: General corporate purposes; proceeds are expected to further strengthen liquidity
Format: SEC Registered
Governing Law: New York
Expected Listing: Nasdaq Bond Exchange
ISIN: US58733RAJ14
Guarantors: MercadoLibre S.R.L., Mercado Livre Brasil Ltda., MercadoLibre Chile Ltda., DeRemate.com de México, MP Agregador and MercadoLibre Colombia Ltda.
