XML 32 R20.htm IDEA: XBRL DOCUMENT v3.22.2.2
Loans Payable And Other Financial Liabilities
 9 Months Ended
Sep. 30, 2022
Loans Payable And Other Financial Liabilities [Abstract]  
Loans Payable And Other Financial Liabilities 11. Loans payable and other financial liabilities

The following tables summarize the Company’s Loans payable and other financial liabilities as of September 30, 2022 and December 31, 2021:

Book value as of

September 30, 2022

December 31, 2021

(In millions)

Current loans payable and other financial liabilities:

Loans from banks

$

369 

$

378 

Bank overdrafts

61 

146 

Secured lines of credit

97 

73 

Financial Bills

105 

—

Deposit Certificates

912 

582 

Commercial Notes

2 

—

Finance lease obligations

14 

10 

Collateralized debt

372 

77 

2028 Notes

1 

3 

2026 Sustainability Notes

2 

4 

2031 Notes

5 

10 

Other lines of credit

6 

2 

$

1,946 

$

1,285 

Non-Current loans payable and other financial liabilities:

Loans from banks

$

154 

$

8 

Secured lines of credit

25 

17 

Financial Bills

—

92 

Deposit Certificates

4 

3 

Commercial Notes

181 

—

Finance lease obligations

38 

36 

Collateralized debt

815 

674 

2028 Notes

435 

312 

2026 Sustainability Notes

397 

397 

2031 Notes

694 

694 

$

2,743 

$

2,233 


‎

Book value as of

Type of instrument

Currency

Interest

Weighted Average Interest
‎Rate

Maturity

September 30, 2022

December 31, 2021

(In millions)

Loans from banks

Chilean Subsidiaries

Chilean Pesos

Fixed

10.54 

%

October 2022- April 2025

$

136 

$

117 

Brazilian Subsidiary

US Dollar

Variable

—

%

—

—

60 

Brazilian Subsidiaries

US Dollar

Fixed

1.50 

%

November - December 2022

101 

100 

Brazilian Subsidiary (*)

US Dollar

Fixed

4.32 

%

August 2023

57 

—

Brazilian Subsidiary

Brazilian Reais

Variable

TJLP + 0.8

%

October 2022 - May 2031

8 

4 

Mexican Subsidiary

Mexican Pesos

Variable

TIIE + 2.20 - 3.50

%

October 2022 - June 2027

187 

66 

Uruguayan Subsidiary

Uruguayan Pesos

Fixed

10.85 

%

December 2022

18 

23 

Colombian Subsidiary

Colombian Pesos

Fixed

10.74 

%

November - December 2022

16 

16 

Bank overdrafts

Uruguayan Subsidiary

Uruguayan Pesos

Fixed

10.19 

%

October 2022

28 

27 

Argentine Subsidiary

Argentine Pesos

Fixed

68.26 

%

October 2022

33 

115 

Brazilian Subsidiary

Brazilian Reais

—

—

%

—

—

4 

Secured lines of credit

Argentine Subsidiaries

Argentine Pesos

Fixed

64.54 

%

October 2022

90 

69 

Mexican Subsidiary

Mexican Pesos

Fixed

9.99 

%

October 2022- July 2027

32 

21 

Financial Bills

Brazilian Subsidiary

Brazilian Reais

Variable

CDI + 0.95 - 1.10

%

July 2023 - February 2024

105 

92 

Deposit Certificates

Brazilian Subsidiary

Brazilian Reais

Variable

IPCA + 5.25 -7.15

%

February - May 2023

254 

—

Brazilian Subsidiary

Brazilian Reais

Variable

97% to 200% of CDI

October 2022 - September 2024

491 

521 

Brazilian Subsidiary

Brazilian Reais

Fixed

8.15 - 15.00

%

October 2022 - July 2023

171 

41 

Brazilian Subsidiary

Brazilian Reais

—

—

%

—

—

23 

Commercial Notes

Brazilian Subsidiary

Brazilian Reais

Variable

DI + 0.88

%

October 2022 - August 2027

64 

—

Brazilian Subsidiary

Brazilian Reais

Variable

IPCA + 6.41

%

October 2022 - August 2029

119 

—

Finance lease obligations

52 

46 

Collateralized debt

1,187 

751 

2028 Notes

436 

315 

2026 Sustainability Notes

399 

401 

2031 Notes

699 

704 

Other lines of credit

6 

2 

$

4,689 

$

3,518 

 

(*)

The carrying amount includes the effect of the derivative instrument that qualified for fair value hedge. See note 14 "Derivative Instruments" for further detail. 

See Notes 12 and 13 to these interim condensed consolidated financial statements for details regarding the Company’s collateralized debt securitization transactions and finance lease obligations, respectively.

2.375% Sustainability Senior Notes Due 2026 and 3.125% Senior Notes Due 2031

On January 14, 2021, the Company closed a public offering of $400 million aggregate principal amount of 2.375% Sustainability Notes due 2026 (the “2026 Sustainability Notes”) and $700 million aggregate principal amount of 3.125% Notes due 2031 (the “2031 Notes”, and together with the 2026 Sustainability Notes, the “Notes”). The Company pays interest on the Notes on January 14 and July 14 of each year, beginning on July 14, 2021. The 2026 Sustainability Notes will mature on January 14, 2026, and the 2031 Notes will mature on January 14, 2031. In connection with the Notes, the Company capitalized $11 million of debt issuance costs, which are amortized during the term of the Notes. The Company intends to allocate an amount equal to the net proceeds from the sale of the 2026 Sustainability Notes to finance or refinance Eligible Projects. “Eligible Projects” are investments and expenditures made by the Company beginning with the issuance date of the 2026 Sustainability Notes or in the 24 months prior to the issuance of the 2026 Sustainability Notes, that: (i) contribute to environmental objectives such as: clean transportation, land conservation and preservation, energy efficiency, renewable energy, green buildings and pollution prevention and control, (ii) aim to address or mitigate a specific social issue or seek to achieve positive social outcomes especially, but not exclusively, for one or more target populations or (iii) combine (i) and (ii).

Certain of the Company’s subsidiaries (the “Subsidiary Guarantors”) fully and unconditionally guarantee the payment of principal, premium, if any, interest, and all other amounts in respect of each of the Notes (the “Subsidiary Guarantees”). The initial Subsidiary Guarantors were MercadoLibre S.R.L., Ibazar.com Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Envios Servicos de Logistica Ltda., Mercado Pago Instituição de Pagamento Ltda. (formerly known as “MercadoPago.com Representações Ltda.”), MercadoLibre Chile Ltda., MercadoLibre, S.A. de C.V., Institución de Fondos de Pago Electrónico (formerly known as “MercadoLibre, S. de R.L. de C.V.”), DeRemate.com de México, S. de R.L. de C.V. and MercadoLibre Colombia Ltda. On October 27, 2021, MercadoLibre, S.A. de C.V., Institución de Fondos de Pago Electrónico became an excluded subsidiary pursuant to the terms of the Notes and it was released from its Subsidiary Guaranty. On October 27, 2021, MP Agregador, S. de R.L. de C.V. became a Subsidiary Guarantor under the Notes. On July 1, 2022, Ibazar.com Atividades de Internet Ltda. was merged into eBazar.com.br Ltda.

The Notes rank equally in right of payment with all of the Company’s other existing and future senior unsecured debt obligations from time to time outstanding. Each Subsidiary Guarantee will rank equally in right of payment with all of the Subsidiary Guarantor’s other existing and future senior unsecured debt obligations from time to time outstanding, except for statutory priorities under applicable local law.

2.00% Convertible Senior Notes Due 2028

On August 24, 2018, the Company issued $800 million of 2.00% Convertible Senior Notes due 2028 and issued an additional $80 million of notes on August 31, 2018 pursuant to the partial exercise of the initial purchasers’ option to purchase such additional notes, for an aggregate principal amount of $880 million of 2.00% Convertible Senior Notes due 2028 (collectively, the “2028 Notes”). The 2028 Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually, on February 15 and August 15 of each year, at a rate of 2.00% per annum. The 2028 Notes will mature on August 15, 2028 unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. The 2028 Notes may be converted, under specific conditions, based on an initial conversion rate of 2.2553 shares of common stock per $1,000 principal amount of the 2028 Notes (equivalent to an initial conversion price of $443.40 per share of common stock), subject to adjustment as described in the indenture governing the 2028 Notes. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. As of September 30, 2022, the principal and issuance costs of the 2028 Notes amounted to $439 million and $4 million, respectively. For the nine and three-month periods ended September 30, 2022 the Company recognized interest expense, including the amortization of issuance costs, of $7 million and $2 million, respectively. For additional information regarding the 2028 Notes please refer to Note 2 and Note 16 to the audited consolidated financial statements for the year ended December 31, 2021, contained in the Company’s Annual Report on Form 10-K filed with the SEC.

During the nine-month period ended September 30, 2022, 7 Notes were requested for conversion, for a total principal amount of $7 thousand. The determination of whether or not the Notes are convertible must be performed on a quarterly basis. The Company reconfirmed during the third quarter of 2022 that the conversion threshold was met and the Notes remain eligible for conversion. As of the date of issuance of these interim condensed consolidated financial statements, the Company did not receive additional requests for conversion.

In January 2021, the Company repurchased $440 million principal amount of the outstanding of the 2028 Notes. The total amount paid amounted to $1,865 million, which includes principal, interest accrued and premium. The settlement consideration was first allocated to the extinguishment of the liability component of the 2028 Notes repurchased. The difference of $30 million between the fair value of the liability component and the net carrying amount of the liability component and unamortized debt issuance costs was recognized as a loss on debt extinguishment; in addition, $19 million paid as a premium was recognized as a loss in Interest expense and other financial losses line in the consolidated statement of income in January 2021. The remaining consideration of $1,484 million (net of income tax effects) was allocated to the reacquisition of the equity component and recognized as a reduction of stockholders’ equity.

The total estimated fair value of the 2028 Notes was $880 million and $1,367 million as of September 30, 2022 and December 31, 2021, respectively. The fair value was determined based on the closing trading price per $100 principal amount of the 2028 Notes as of the last day of trading for the period. The Company considered the fair value of the 2028 Notes as of September 30, 2022 and December 31, 2021 to be a Level 2 measurement. The fair value of the 2028 Notes is primarily affected by the trading price of the Company’s common stock and market interest rates. Based on the $827.78 closing price of the Company’s common stock on September 30, 2022, the if-converted value of the 2028 Notes exceeded their principal amount by $381 million.

Revolving Credit Agreement

On March 31, 2022, the Company, as borrower, entered into a $400 million revolving credit agreement (the “Credit Agreement”). Under the Credit Agreement, the Company’s subsidaries MercadoLibre S.R.L., eBazar.com.br Ltda, Mercado Envios Serviços de Logística Ltda., Mercado Pago Instituição de Pagamento Ltda., DeRemate.com de México S. de R.L. de C.V., MP Agregador, S. de R.L. de C.V., MercadoLibre Chile Ltda., and MercadoLibre Colombia Ltda. have guaranteed the Company’s obligations.

The interest rates under the Credit Agreement are based on Adjusted Term SOFR (“Secured Overnight Funding Rate”) plus an interest margin of 1.25% per annum. Any loans drawn under the Credit Agreement must be repaid on or prior to March 31, 2025. The Company is also obligated to pay a commitment fee on the unused amounts of the facility at an annual rate of 0.3125%.

As of September 30, 2022, no amounts have been borrowed under the facility.