Títulos de Crédito Extranjero,
América Móvil's global 15 billion Mexican
peso ($1.2 billion) bond in November 2012 introduced a
new structure, drawing domestic and foreign investors into
local currency notes. The structure mimics the seamless
capability of the Mexican sovereign's bonds to create liquid
benchmarks with both local and global buyers without the need
for separate bonds or global depository notes. One issuer, one
curve. Many local-currency sales have pushed envelopes in the
international area in terms of size and tenor in the last 15
years. However, this innovation could change the game for the
growing class of blue chip LatAm borrowers accessing global
pools of liquidity. The 2022 senior unsecured bond, known as
Títulos de Crédito Extranjeros, are
Securities and Exchange Commission (SEC) and Comisión
Nacional Bancaria y de Valores (CNBV) registered, denominated
and settled in pesos. They trade on a fungible basis in the
international markets and Mexico.
The títulos attracted more than 50 billion
pesos in demand, with 80% coming from foreign
investors and 20% from LatAm, largely allocated to Mexico
The dual-registration was important: registering the bonds
only in Mexico would have stopped some international investors
buying such bonds, while selling them in the US, even in
pesos, would have left many Mexican investors unable
to buy or trade the bonds, says Carlos García Moreno,
the telco's chief financial officer.
"The banking commission in Mexico basically changed their
requirement such that if we already had certain securities
listed, say in the US, the very same securities could be listed
in Mexico," he says.
Already the structure has found followers: Mexico's Televisa
used the format for its own issue in May. América
Móvil, meanwhile, expects to reinstate quarterly
re-openings of the títulos after skipping the
second quarter of 2013.
"The notion is to reopen the títulos every quarter
which was meant to give investors a sense of liquidity, but
with broad moves in rates the last thing investors want to hear
about is new supply," says García Moreno.