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Loans payable and other financial liabilities
 9 Months Ended
Sep. 30, 2023
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 September 30, 2023 and December 31, 2022:
September 30, 2023December 31, 2022
(In millions)
Current loans payable and other financial liabilities:
Loans from banks$489 $319 
Bank overdrafts— 9 
Secured lines of credit94 115 
Financial Bills— 113 
Deposit Certificates901 993 
Commercial Notes2 6 
Finance lease obligations20 14 
Collateralized debt664 535 
2028 Notes87 3 
2026 Sustainability Notes2 4 
2031 Notes4 10 
Other lines of credit9 10 
$2,272 $2,131 
Non-Current loans payable and other financial liabilities:
Loans from banks$90 $145 
Secured lines of credit19 24 
Financial Bills8 — 
Deposit Certificates— 3 
Commercial Notes202 187 
Finance lease obligations40 37 
Collateralized debt774 703 
2028 Notes— 436 
2026 Sustainability Notes397 398 
2031 Notes651 694 
Other lines of credit1 — 
$2,182 $2,627 
Type of instrumentCurrencyInterestWeighted Average Interest Rate MaturitySeptember 30, 2023December 31, 2022
 (In millions)
Loans from banks
Chilean SubsidiariesChilean PesosFixed9.99%October 2023 - April 2025$102 $150 
Brazilian Subsidiary (*)US DollarFixed5.75%November 202352 — 
Brazilian Subsidiary (*)US Dollar——%—— 59 
Brazilian Subsidiary (*)US DollarFixed5.91%August 2024162 — 
Brazilian SubsidiaryBrazilian ReaisVariable
TJLP + 0.8
%October 2023 - May 20319 9 
Mexican SubsidiaryMexican PesosVariable
TIIE + 2.20 - 3.50
%October 2023 - June 2027192 177 
Uruguayan SubsidiaryUruguayan PesosFixed9.90%October 202348 47 
Colombian SubsidiaryColombian PesosFixed13.98%November 202314 22 
Bank overdrafts
Uruguayan SubsidiaryUruguayan Pesos——%—— 9 
Secured lines of credit
Argentine SubsidiariesArgentine PesosFixed103.12%October 202384 107 
Mexican SubsidiaryMexican PesosFixed10.17%October 2023 - July 202729 32 
Financial Bills
Brazilian SubsidiaryBrazilian ReaisVariable
CDI + 1.15 - 1.40
%March - June 20258 113 
Deposit Certificates
Brazilian SubsidiaryBrazilian Reais——%—— 272 
Brazilian SubsidiaryBrazilian ReaisVariable
100% to 140% of CDI
October 2023 - September 2024769 565 
Brazilian SubsidiaryBrazilian ReaisFixed
11.90 - 14.40
%October 2023 - April 202492 114 
Brazilian SubsidiaryBrazilian ReaisVariable
106.50% of CDI
November 202340 45 
Commercial Notes
Brazilian SubsidiaryBrazilian ReaisVariable
DI + 0.88
%October 2023 - August 202772 71 
Brazilian SubsidiaryBrazilian ReaisVariable
IPCA + 6.41
%October 2023 - August 2029132 122 
Finance lease obligations60 51 
Collateralized debt1,438 1,238 
2028 NotesUS DollarFixed2.00%October - November 202387 439 
2026 Sustainability NotesUS DollarFixed2.375%January 2024 - January 2026399 402 
2031 NotesUS DollarFixed3.125%January 2024 - January 2031655 704 
Other lines of credit10 10 
$4,454 $4,758 
(*)The carrying amount includes the effect of the derivative instrument that qualified for fair value hedge accounting. See Note 15 "Derivative instruments" for further detail.
See Notes 13 and 14 to these unaudited 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”).
In May 2023, the Company repurchased a $2 million and $44 million principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively. The total amount paid amounted to $38 million. For the nine-month periods ended September 30, 2023, the Company recognized $8 million as a gain in Interest income and other financial gains in the unaudited interim condensed consolidated statements of income.
For additional information regarding the 2026 Sustainability Notes and the 2031 Notes please refer to Note 17 to the audited consolidated financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K.
2.00% Convertible Senior Notes Due 2028 (“2028 Notes”)
On September 19, 2023, the Company announced its intention to redeem all its 2028 Notes on November 14, 2023. Holders of the 2028 Notes may elect to convert their notes at any time before November 13, 2023. Each $1,000 principal amount of 2028 Notes is convertible into 2.2952 shares of MercadoLibre common stock.
This conversion rate reflects an increase of 0.0399 additional shares per $1,000 principal amount of 2028 Notes above the otherwise applicable conversion rate, which applies because the notes have been called for redemption. The Company settles any conversions solely in shares of common stock, except that any fractional shares that would otherwise be deliverable are paid out in cash. The redemption price to be paid for any notes that are not converted will be 100% of the redeemed notes’ principal amount plus accrued and unpaid interest up to, but excluding, the redemption date.
As of September 30, 2023, holders of the 2028 Notes converted $351 million principal amount of 2028 Notes into 806,629 shares of the Company’s common stock which MercadoLibre held as treasury stock. As of September 30, 2023, these 2028 Notes conversions generated a non-cash transaction of $350 million. As of the date of issuance of these unaudited interim condensed consolidated financial statements, $379 million principal amount of 2028 Notes were converted into 869,692 shares of the Company’s common stock. After all 2028 Notes’ conversions mentioned, the outstanding principal amount of 2028 Notes is $60 million.
The Company entered into 2028 Notes Capped Call Transactions. The settlement averaging period with respect to the 2028 Notes Capped Call Transactions began on June 28, 2023 and ended on August 30, 2023, and the 2028 Notes Capped Call Transactions settlement date was September 1, 2023. As a result the Company received 289,675 shares of common stock.
As of September 30, 2023, the principal and issuance costs of the 2028 Notes amounted to $88 million and $1 million, respectively. As of December 31, 2022, the principal and issuance costs of the 2028 Notes amounted to $439 million and $3 million, respectively. For the nine and three-month periods ended September 30, 2023 and 2022, the Company recognized interest expense, including the amortization of issuance costs of $7 million and $2 million, in both periods, respectively.
For additional information regarding the 2028 Notes and the 2028 Notes Capped Call Transactions please refer to Note 17 to the audited consolidated financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K.
Revolving Credit Agreement
On March 31, 2022, the Company, as borrower, and certain of its Subsidiaries, as guarantors, entered into a $400 million revolving credit agreement. For additional information regarding the Credit Agreement please refer to Note 17 to the audited consolidated financial statements for the year ended December 31, 2022, contained in the Company’s 2022 10-K.
As of September 30, 2023, no amounts have been borrowed under the facility.