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LOANS PAYABLE AND OTHER FINANCIAL LIABILITIES
 12 Months Ended
Dec. 31, 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 December 31, 2023 and 2022:

December 31,
20232022
(In millions)
Loans from banks$485 $319 
Bank overdrafts33 9 
Secured lines of credit39 115 
Financial Bills— 113 
Deposit Certificates976 993 
Commercial Notes7 6 
Finance lease liabilities35 14 
Collateralized debt693 535 
2028 Notes— 3 
2026 Sustainability Notes4 4 
2031 Notes9 10 
Other lines of credit11 10 
Current loans payable and other financial liabilities$2,292 $2,131 
Loans from banks$72 $145 
Secured lines of credit17 24 
Financial Bills8 — 
Deposit Certificates— 3 
Commercial Notes211 187 
Finance lease liabilities96 37 
Collateralized debt782 703 
2028 Notes— 436 
2026 Sustainability Notes389 398 
2031 Notes626 694 
Other lines of credit2 — 
Non-Current loans payable and other financial liabilities$2,203 $2,627 
Type of instrumentCurrencyInterestWeighted Average Interest
Rate 		MaturityDecember 31,
20232022
 (In millions)
Loans from banks
Chilean SubsidiariesChilean PesosFixed9.48%January 2024 - April 2025$104 $150 
Brazilian Subsidiary (1)
US Dollar———— 59 
Brazilian Subsidiary (1)
US DollarFixed5.90%August - November 2024216 — 
Brazilian SubsidiaryBrazilian ReaisVariable
TJLP + 0.8%
January 2024 - May 20319 9 
Mexican SubsidiaryMexican PesosVariable
TIIE + 2.20% - 3.50%
January 2024 - June 2027178 177 
Uruguayan SubsidiaryUruguayan PesosFixed9.59%January 202450 47 
Colombian SubsidiaryColombian PesosFixed——— 22 
Bank overdrafts
Uruguayan SubsidiaryUruguayan PesosFixed10.32%January 202413 9 
Chilean SubsidiaryChilean PesosVariable
TIB + 2.00%
January 202420 — 
Secured lines of credit
Argentine SubsidiariesArgentine PesosFixed92.27%January 202429 107 
Mexican SubsidiaryMexican PesosFixed10.24%January 2024 - July 202727 32 
Financial Bills
Brazilian SubsidiaryBrazilian ReaisVariable
CDI + 1.15% - 1.40%
March - September 20258 113 
Deposit Certificates
Brazilian SubsidiaryBrazilian Reais———— 272 
Brazilian SubsidiaryBrazilian ReaisVariable
98.5% to 200% of CDI
January - December 2024703 565 
Brazilian SubsidiaryBrazilian ReaisFixed
9.85% - 14.20%
January - June 202477 114 
Brazilian SubsidiaryBrazilian ReaisVariable
106% of CDI
January 2024196 45 
Commercial Notes
Brazilian SubsidiaryBrazilian ReaisVariable
DI + 0.88%
January 2024 - August 202778 71 
Brazilian SubsidiaryBrazilian ReaisVariable
IPCA + 6.41%
January 2024 - August 2029140 122 
Finance lease liabilities131 51 
Collateralized debt1,475 1,238 
2028 NotesUS Dollar———— 439 
2026 Sustainability NotesUS DollarFixed2.375%January 2024 - January 2026393 402 
2031 NotesUS DollarFixed3.125%January 2024 - January 2031635 704 
Other lines of credit13 10 
$4,495 $4,758 
(1) The carrying amount includes the effect of the derivative instrument that qualified for fair value hedge accounting. See Note 24 – Derivative instruments of these audited consolidated financial statements for further detail.
See Note 21 – Securitization transactions and Note 23 – Leases of these audited consolidated financial statements for details regarding the Company’s collateralized debt securitization transactions and finance lease liabilities, 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.
During 2023, the Company repurchased $9 million and $70 million principal amount of the outstanding 2026 Sustainability Notes and 2031 Notes, respectively plus $1 million of interest accrued. The total amount paid amounted to $66 million. For the year ended December 31, 2023, the Company recognized $14 million as a gain in Interest income and other financial gains in the consolidated statement of income.
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% 2028 Notes. The 2028 Notes were unsecured, unsubordinated obligations of the Company, which paid 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 would have matured on August 15, 2028 unless earlier redeemed, repurchased or converted in accordance with their terms prior to such date. The 2028 Notes were convertible, 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 did 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 was at or above 130% of the conversion price during specified periods, the Company could (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 were 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 was 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 called 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 could convert their 2028 Notes at any time, regardless of the foregoing circumstances.
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.
On September 19, 2023, the Company announced its intention to redeem all its 2028 Notes on November 14, 2023. Holders of the 2028 Notes could elect to convert their notes at any time before November 13, 2023. Each $1,000 principal amount of 2028 Notes was convertible into 2.2952 shares of MercadoLibre common stock.
This conversion rate reflected an increase of 0.0399 additional shares per $1,000 principal amount of 2028 Notes above the otherwise applicable conversion rate, which applied because the notes were called for redemption. The Company settled any conversions solely in shares of common stock, except that any fractional shares that would otherwise be deliverable were paid out in cash. The redemption price paid for any notes that were not converted was 100% of the redeemed notes’ principal amount plus accrued and unpaid interest up to, but excluding, the redemption date.
As of November 13, 2023, holders of the 2028 Notes converted $439 million principal amount of 2028 Notes into 1,007,597 shares of the Company’s common stock which MercadoLibre held as treasury stock. As of December 31, 2023, no principal amount of 2028 Notes remained outstanding. As of December 31, 2022, the principal and issuance costs of the 2028 Notes amounted to $439 million and $3 million, respectively.
The Company entered into 2028 Notes Capped Call Transactions. The 2028 Notes Capped Call Transactions were 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 was greater than the strike price and lower than the cap price of the 2028 Notes Capped Call Transactions. 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. 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.
The following table presents the interest expense for contractual interest, the amortization of debt discount and of debt issuance costs:
Year ended December 31,
202320222021
(In millions)
Contractual coupon interest expense$7 $8 $9 
Amortization of debt discount (1)
— — 16 
Amortization of debt issuance costs— 1 — 
Total interest expense related to the 2028 Notes$7 $9 $25 
(1) For the years ended December 31, 2023 and 2022 no amortization of debt discount was recorded due to the adoption of ASU 2020-06.
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, 2023, no amounts have been borrowed under the facility.