Mexico's Sterling Effort
Mexico sold the largest-ever bond in British pounds placed by an emerging market issuer, locking in low prices in a demanding market that few Latin American issuers can access on a regular basis.
Most Latin American market bonds are denominated in dollars,
a few in euros and almost none in British pounds. The sterling
market is comparatively small and Britain's institutional
investors are usually perfectly happy to buy bonds in other
currencies and swap them into sterling.
So it was surprising that the Mexican government, an
investment grade sovereign, decided to sell a £500
million ($901 million), 20-year fixed rate bond in January, the
largest and longest-dated sterling issue ever by an emerging
market issuer, says Carlos Mauleón, head of Latin
American debt capital markets at Barclays Capital, the joint
bookrunner on the deal. Issuing in sterling was an important
way for Mexico to diversify its funding sources and cultivate a
new set of demanding investors. British fund managers are
known, feared even, for their rigorously analytical approach to
Andrés Conesa, head of public credit at
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