Currency exposure “comfortable”, says Díaz de León after sterling century
Mexico is “comfortable” with the currency exposure of its 100-year GBP bond sale, its head of public credit Alejandro Díaz de León tells LatinFinance
Mexico's sale of a 100-year bond in sterling complies with the
country's debt diversification strategy, and the currency
exposure is not a concern, the country's head of public credit,
Alejandro Díaz de León told LatinFinance
after the sale on Wednesday.
Source: Dave McLear
"We usually keep the exposure in the currency that we issue.
We're not compelled to swap this in a particular short range of
time. We are comfortable with keeping the exposure in its
original currency," he said.
Barclays and Goldman Sachs priced the £1bn 2114
transaction on Wednesday.
After an absence from the sterling market of nearly 10
years, a return to the currency made sense for diversification
purposes, he said.
"It opened back up for us some presence with key, long-term
institutional investors in sterling, and we saw that in the
book - we saw a very strong and good quality book."
Díaz de León said he was pleased with the
pricing of the deal. "We have done two [100-year] issuances in
the past in the dollar market. This transaction was more than
60% larger - the other two were each $1bn. And in terms of
pricing the 2010 centennial was issued at 6.1% yield. It was
retapped in August 2011 at 5.96% yield. And this was done at
5.75%, which comes clearly below the others."
Despite the overwhelming size of the bond sale - the
sovereign had increased the deal from a £300m to
£500m target on the back of nearly £2.5bn of orders
from 150 accounts - the borrower will continue monitoring
markets, he said. "We have done a significant part of our
external financing for the year, but we still have some room.
We're quite flexible and we can issue a little bit more on the
domestic side or the external side," said Díaz de
"We will still keep an eye on potential alternatives that we
can find attractive in different currencies - in the euro, the
yen and the dollar - and we'll have a close eye on those
markets to see if there's a potential transaction."
Full details on the deal's execution:
Mexico plants DCM flag with ultra-long
Alejandro Díaz de León interview with
LatinFinance in Mexico City earlier this month:
Mexico looks at euros, yen for bond window - Diaz de