Item 7.01. Regulation FD Disclosure.
MercadoLibre, Inc. Guaranteed Senior Notes Offering
On January 4, 2021, MercadoLibre, Inc. (the "Company", or "we") issued a press
release announcing the commencement of a proposed offering of guaranteed senior
notes (the "Notes"), including a series of guaranteed senior sustainable notes
(the "Sustainable Notes"), subject to market and other conditions. The Notes
will be unsecured obligations of the Company and will be fully and
unconditionally guaranteed by its subsidiaries MercadoLibre S.R.L., Ibazar.com
Atividades de Internet Ltda., eBazar.com.br Ltda., Mercado Envios Servicos de
Logistica Ltda., MercadoPago.com Representações Ltda., MercadoLibre Chile Ltda.,
MercadoLibre, S. de R.L. de C.V., DeRemate.com de México, S. de R.L. de C.V. and
MercadoLibre Colombia Ltda. A copy of the press release is furnished as Exhibit
99.1.
The Company intends to use the net proceeds from the sale of the Sustainable
Notes to finance or refinance, in whole or in part, one or more new or existing
Eligible Projects, which are defined as investments and expenditures made by the
Company or any of the Company's subsidiaries after the issuance date of the
Sustainable Notes or made by the Company or its subsidiaries in the 24 months
prior to the issuance of the 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).
The Company intends to use the net proceeds from the sale of Notes other than
the Sustainable Notes for general corporate purposes. The Company has
outstanding $880 million in aggregate principal amount of 2.00% Convertible
Senior Notes Due 2028 (the "2028 Notes"), which are convertible to shares of
common stock currently at a conversion price of $443.40 per share of common
stock. The Company is considering entering into agreements to repurchase up to
half the outstanding principal amount of the 2028 Notes at a substantial premium
to their par value, as well as the possibility of entering into capped call
transactions that would generally reduce the potential dilution upon conversion
of the 2028 Notes. If the Company enters into these agreements, the use of
proceeds of Notes other than the Sustainable Notes may include funding a portion
of the price to repurchase 2028 Notes and the premium for capped calls.
Recent Developments
In connection with the launch of the Notes offering, the Company provided the
following disclosure on recent developments. The Company expects to announce
its results for the fourth quarter of 2020 and for the full year 2020 on
February 24, 2021. While not final, and subject to adjustment as the Company
completes its review, its preliminary data indicates that the gross merchandise
volume (GMV) on MercadoLibre Marketplace and the total payment volume (TPV)
using MercadoPago, including marketplace and non-marketplace transactions, were
both up significantly for the fourth quarter of 2020, as compared to the same
period in the prior year, and for the full year 2020 as compared to 2019. The
growth was partially driven by consumer behavior due to COVID-19 which may not
continue in 2021.
Based on preliminary internal analysis, the Company expects that revenue growth
for the fourth quarter of 2020, as compared to the same quarter in 2019, will be
generally in line with recent quarters. The Company also expects continued
improvement in income (loss) from operations, both in absolute terms and as a
percentage of net revenues (operating margin), in each case comparing fourth
quarter of 2020 to fourth quarter of 2019. This will result in a loss from
operations for the fourth quarter of 2020, which will be smaller than for the
fourth quarter of 2019. When compared to the third quarter of 2020, the expected
decline in income (loss) from operations during the fourth quarter of 2020 is
primarily driven by significant seasonal spending on logistics and marketing to
drive revenue growth during the holiday shopping season.
The information provided above is preliminary, and our actual operating results
for the fourth quarter and full year may materially differ from this
information. The Company has not completed its quarter-end and year-end closing
and review procedures, has not prepared its financial statements, and its
auditors have not begun audit procedures; the information is subject to change
as a result of those procedures.
* * *
A copy of the prospectus and preliminary prospectus supplement for the offering
of the Notes may be obtained for free by visiting EDGAR on the SEC website at
www.sec.gov or, alternatively, by calling BNP Paribas Securities Corp. at
+1-800-854-5674, BofA Securities, Inc. at +1-800-294-1322, Citigroup Global
Markets Inc. at +1-800-831-9146, Goldman Sachs & Co. LLC at +1-800-828-3182 or
J.P. Morgan Securities LLC at +1-212-834-4533.
The information furnished with this Current Report (including Exhibit 99.1)
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as expressly set forth by specific reference in such a
filing.
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Forward-Looking Statements
Any statements herein regarding MercadoLibre, Inc. that are not historical or
current facts are forward-looking statements. These forward-looking statements
convey MercadoLibre, Inc.'s current expectations or forecasts of future events.
Forward-looking statements regarding MercadoLibre, Inc. involve known and
unknown risks, uncertainties and other factors that may cause MercadoLibre,
Inc.'s actual results, performance or achievements to be materially different
from any future results, performances or achievements expressed or implied by
the forward-looking statements. Certain of these risks and uncertainties are
described in the "Risk Factors," "Forward-Looking Statements" and "Cautionary
Statement Regarding Forward-Looking Statements" sections of MercadoLibre, Inc.'s
annual report on Form 10-K for the year ended December 31, 2019, as amended by
our Post-Effective Amendment No. 1 to Form 10-K, filed with the SEC on December
23, 2020, and quarterly reports on Form 10-Q for the quarters ended March 31,
2020, June 30, 2020, and September 30, 2020, and any of MercadoLibre, Inc.'s
other applicable filings with the SEC. Unless required by law, MercadoLibre,
Inc. undertakes no obligation to publicly update or revise any forward-looking
statements to reflect circumstances or events after the date hereof.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit
Number Description
99.1 Press Release dated January 4, 2021
104 The cover page from this Current Report on Form 8-K, formatted in Inline
XBRL.
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