Fine-Tuning Market Debt
Mexico carried out a landmark global-for-global bond exchange in April. Andrés Conesa, head of public credit, says the deal saved money, improved investor relations and will help the sovereign price future bond issues more efficiently.
What did the exchange consist of? We swapped $2.3 billion of
existing global bonds that mature in 2019, 2022 and 2026 and
had higher coupons, dollar prices and traded wide to our curve,
for $2.87 billion in new bonds. We reopened our 2014 bond,
selling $793million in 10-year bonds and also the 2033, where
we sold $2.06 billion of 30-year bonds. We made net present
value (NPV) savings of $50 million in interest with lower
coupons and dollar prices, and extended the average life
of these bonds by four years. Eliminating the
higher-priced bonds means the pricing of future placements will
be much more efficient What was the purpose of Mexico's latest
exchange? The latest exchange is the first in a new generation
of liability management. We ended the first chapter of our
liability management last year when we retired the last of
Mexico's Brady bonds. The next natural...
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