By Katie Llanos-Small and Taimur Ahmad
LOCAL CURRENCY DEBT: After the storm
In the wake of a brutal sell-off, investors are rushing back to local currency emerging market debt. But this time, the bet is no longer one way
Mexico’s state-owned oil company Pemex marked a
turning point for Latin borrowers in September when it
succeeded in selling a peso-denominated global depository note.
It was the first such local currency instrument sold since
the bond market re-priced spectacularly in May and June, on
expectations of tighter global liquidity.
"We were able to issue this local bond, even though the
market was in a very complicated situation," says Rodolfo
Campos, Pemex’s treasurer.
The oil giant raised 10.4 billion Mexican pesos ($818
million) by selling the GDN. Investors bought the bonds, but it
was tougher than the banks running the deal had expected. The
bond was priced to yield 7.19%, as much as 40 basis points
cheaper than early indications.
Yet the deal represented the first sign of life in the
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