MercadoLibre announced the issuance of $750 million in senior unsecured notes due January 2033, carrying a 4.90 % coupon and oversubscribed 3.6 times by more than 150 institutional investors. The offering is the company’s first debt issuance since it achieved investment‑grade ratings from both Fitch and S&P, underscoring the market’s confidence in its financial strength.
The proceeds will be deployed for general corporate purposes and to bolster liquidity, allowing MercadoLibre to continue investing in its e‑commerce, fintech, and logistics ecosystem. CFO Martin de los Santos said the deal “reinforces investor support for our strategy and reflects the strength of our business model, financials and cash flow generation,” and that it “optimizes our funding structure under attractive market conditions after achieving investment‑grade status.”
While the market welcomed the strong demand for the notes, it also weighed the company’s recent earnings. Q3 2025 revenue of $7.41 billion beat expectations by $220 million, driven by 33 % growth in commerce and 49 % growth in fintech. However, EPS fell short of the $10.72 consensus by $2.40, a miss of 22 %. The miss was largely due to a 260‑basis‑point contraction in gross margin to 43.3 % and a 70‑basis‑point drop in operating margin to 9.8 %, attributed to higher funding costs in Argentina and increased operating expenses as the company expands free‑shipping programs in Brazil.
The company’s segment performance highlights a robust growth engine: commerce and fintech each grew at double‑digit rates, while logistics and advertising remain steady contributors. Yet the margin compression signals short‑term headwinds—higher Argentine funding costs and rising fulfillment expenses are eroding profitability, even as revenue accelerates. Management acknowledges these pressures but emphasizes that the company’s scale and integrated ecosystem provide a long‑term competitive moat.
In sum, the debt issuance strengthens MercadoLibre’s balance sheet and provides flexibility for continued investment in technology, AI, and market expansion, particularly in Mexico. The company’s ability to raise capital at a low coupon reflects its improved credit profile, while the recent earnings mix and margin dynamics illustrate the trade‑off between aggressive growth initiatives and short‑term profitability. Investors will likely view the notes as a positive step toward sustaining long‑term growth, tempered by the need to manage macro‑economic headwinds and margin pressures.
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