Going Global with Peso Paper
Bancomext, the Mexican government's export-import bank, set a new benchmark in November when it issued the first peso issue that can be traded by international investors.
Investors have made a lot of money over the years by betting
that the economies of eastern Europe would converge with the
European Union. Over the last year, they have been taking the
same approach in Mexico. Bancomext, the Mexican government's
export-import bank, broke new ground in November when it issued
the first Euroclear-registered peso issue, which means it can
be traded by international investors. The MP$1 billion ($97.8
million), 144a three-year issue, led by Morgan Stanley, is
priced at five basis points over TIEE, or the Mexican
inter-bank rate, and has an 11% coupon, giving it an 11.175%
yield to maturity. Bancomext issued the bond from its existing
$2.5 billion Euro medium-term note program. Although the note
looks expensively priced - Mexico is an investment grade issuer
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