XML 43 R27.htm IDEA: XBRL DOCUMENT v3.22.4
Loans Payable And Other Financial Liabilities
 12 Months Ended
Dec. 31, 2022
Debt Disclosure [Abstract]  
Loans Payable And Other Financial Liabilities Loans payable and other financial liabilities
The following tables summarize the Company’s loans payable and other financial liabilities as of December 31, 2022 and 2021:

Book value as of
December 31, 2022December 31, 2021
(In millions)
Current loans payable and other financial liabilities:
Loans from banks$319 $378 
Bank overdrafts9 146 
Secured lines of credit115 73 
Financial Bills113 — 
Deposit Certificates993 582 
Commercial Notes6 — 
Finance lease obligations14 10 
Collateralized debt535 77 
2028 Notes3 3 
2026 Sustainability Notes4 4 
2031 Notes10 10 
Other lines of credit10 2 
$2,131 $1,285 
Non-Current loans payable and other financial liabilities:
Loans from banks$145 $8 
Secured lines of credit24 17 
Financial Bills— 92 
Deposit Certificates3 3 
Commercial Notes187 — 
Finance lease obligations37 36 
Collateralized debt703 674 
2028 Notes436 312 
2026 Sustainability Notes398 397 
2031 Notes694 694 
$2,627 $2,233 
Book value as of
Type of instrumentCurrencyInterestWeighted Average Interest
Rate 		MaturityDecember 31, 2022December 31, 2021
 (In millions)
Loans from banks
Chilean SubsidiariesChilean PesosFixed11.80%January 2023 - April 2025$150 $117 
Brazilian SubsidiaryUS Dollar——%—— 160 
Brazilian Subsidiary (*)US DollarFixed4.32%August 202359 — 
Brazilian SubsidiaryBrazilian ReaisVariable
TJLP + 0.8
%January - May 20319 4 
Mexican SubsidiaryMexican PesosVariable
TIIE + 2.20 - 3.50
%January 2023 - June 2027177 66 
Uruguayan SubsidiaryUruguayan PesosFixed11.73%January - June 202347 23 
Colombian SubsidiaryColombian PesosFixed14.69%January - June 202322 16 
Bank overdrafts
Uruguayan SubsidiaryUruguayan PesosFixed11.97%January 20239 27 
Argentine SubsidiaryArgentine Pesos——%—— 115 
Brazilian SubsidiaryBrazilian Reais——%—— 4 
Secured lines of credit
Argentine SubsidiariesArgentine PesosFixed67.46%January 2023107 69 
Mexican SubsidiaryMexican PesosFixed10.03%January 2023 - July 202732 21 
Financial Bills
Brazilian SubsidiaryBrazilian ReaisVariable
CDI + 0.95 - 1.10
%July 2023 - February 2024113 92 
Deposit Certificates
Brazilian SubsidiaryBrazilian ReaisVariable
IPCA + 5.25 -7.15
%February - May 2023272 — 
Brazilian SubsidiaryBrazilian ReaisVariable
97% to 160% of CDI
January 2023 - September 2024565 521 
Brazilian SubsidiaryBrazilian ReaisFixed
11.35 - 15.00
%January - July 2023114 41 
Brazilian SubsidiaryBrazilian ReaisVariable
105.31% of CDI
February 202345 23 
Commercial Notes
Brazilian SubsidiaryBrazilian ReaisVariable
DI + 0.88
%January 2023 - August 202771 — 
Brazilian SubsidiaryBrazilian ReaisVariable
IPCA + 6.41
%January 2023 - August 2029122 — 
Finance lease obligations51 46 
Collateralized debt1,238 751 
2028 Notes439 315 
2026 Sustainability Notes402 401 
2031 Notes704 704 
Other lines of credit10 2 
$4,758 $3,518 
(*) The carrying amount includes the effect of the derivative instrument that qualified for fair value hedge. See Note 24 “Derivative Instruments” of these audited consolidated financial statements for further detail.
See Notes 21 and 23 of these audited 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 may, at its option, redeem the 2026 Sustainability Notes, in whole or in part, at any time prior to December 14, 2025 (the date that is one month prior to the maturity of the 2026 Sustainability Notes) and the 2031 Notes, in whole or in part, at any time prior to October 14, 2030 (the date that is three months prior to the maturity of the 2031 Notes), in each case by paying 100% of the principal amount of such Notes so redeemed plus the applicable “make-whole” amount and accrued and unpaid interest and additional amounts, if any. The Company may, at its option, redeem the 2026 Sustainability Notes, in whole or in part, on December 14, 2025 or at any time thereafter and the 2031 Notes on October 14, 2030 or at any time thereafter, in each case at the redemption price of 100% of the principal amount of such Notes so redeemed plus accrued and unpaid interest and additional amounts, if any. If the Company experiences certain change of control triggering events, it may be required to offer to purchase the notes at 101% of their principal amount plus any accrued and unpaid interest thereon through the purchase date.
The Company intends to allocate an amount equal to the net proceeds from the issuance 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 and October 1, 2022, Ibazar.com Atividades de Internet Ltda. and Mercado Envios Servicos de Logistica Ltda. were merged into eBazar.com.br Ltda, respectively.
The Notes rank equally in right of payment with all of the Company’s other existing and future senior unsecured debt obligations. 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, 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.
The Company will not have the right to redeem the notes prior to August 21, 2023. On or after August 21, 2023, if the last reported sale price of the Company’s common stock has been at or above 130% of the conversion price during specified periods, the Company may (at its option) redeem all or any portion of the 2028 Notes for cash equal to the 2028 Notes’ principal amount plus accrued and unpaid interest to, but excluding the redemption date.
Holders are able to convert their 2028 Notes at their option at any time prior to February 15, 2028 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2018 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2028 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) if the Company calls any or all of the 2028 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On or after February 15, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their 2028 Notes at any time, regardless of the foregoing circumstances.
During the year ended December 31, 2022, seven Notes were requested for conversion, for a total principal amount of $7 thousand. The Company reconfirmed during the fourth quarter of 2022 that the conversion threshold was met and the Notes remain eligible for conversion. The determination of whether or not the Notes are convertible must continue to be performed on a quarterly basis. From January 1, 2023 to the date of issuance of these consolidated financial statements, additional conversion requests for two notes were made.
The Company has entered into capped call transactions with respect to shares of its common stock with certain financial institutions (the “2028 Notes Capped Call Transactions”). The 2028 Notes Capped Call Transactions are expected generally to reduce the potential dilution upon conversion of the 2028 Notes in the event that the market price of the Company’s Common Stock is greater than the strike price and lower than the cap price of the 2028 Notes Capped Call Transactions. The amounts the Company has paid, including transaction expenses, are as follows:
Capped call trading dateAmount
(In millions)
August 2018 (*)$92 
November 2018 (*)11 
June 2019 (**)88 
June 2020 (**)104 
August, 202083 
November, 2020120 
January, 2021101 
(*)Totally unwinded in 2021.
(**)Partially unwinded in 2021.
In addition, the Company paid $8 million in November 2019 to amend the strike and cap prices of the capped call transaction purchased in November 2018. The cost of the 2028 Notes Capped Call Transactions is included as a net reduction to additional paid-in capital in the stockholders’ equity section of the consolidated balance sheets. In June and August 2021, the Company terminated certain of its 2028 Notes Capped Call Transactions and received as consideration $102 million in cash and 57,047 shares of Common Stock, and $295 million in cash and 89,978 shares of Common Stock, respectively. Cash proceeds of terminating certain of the 2028 Notes Capped Call Transactions in June and August 2021 were used to repurchase 71,175 shares and 158,413 shares of Common Stock, respectively.
Based on the $846.24 closing price of the Company’s Common Stock on December 31, 2022 and if the stock price remains constant, the Company could obtain 177,016 shares of Common Stock on the 2028 Notes Capped Calls Transactions settlement date.
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 were $884 million and $1,367 million as of December 31, 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 December 31, 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 $846.24 closing price of the Company’s common stock on December 31, 2022, the if-converted value of the 2028 Notes exceeds their principal amount by $399 million.
As of December 31, 2022, the principal and issuance costs of the 2028 Notes amounted to $439 million and $3 million, respectively. As of December 31, 2021, the principal and issuance costs of the 2028 Notes amounted to $439 million and $4 million, respectively.
The following table presents the interest expense for contractual interest, the accretion of debt discount and the amortization of debt issuance costs:
Year ended December 31,
202220212020
(In millions)
Contractual coupon interest expense$8 $9 $17 
Amortization of debt discount (*)— 16 26 
Amortization of debt issuance costs1 — 1 
Total interest expense related to the 2028 Notes$9 $25 $44 
(*) For the year ended December 31, 2022 no amortization of debt discount was recorded due to the adoption of ASU 2020-06. See Note 2 "Summary of significant accounting policies - Recently Adopted Accounting Standards" for further detail.
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 subsidiaries MercadoLibre S.R.L., eBazar.com.br Ltda, Mercado Envios Serviços de Logística Ltda. (merged into eBazar.com.br Ltda. on October 1, 2022), 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 December 31, 2022, no amounts have been borrowed under the facility.