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
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 León.
"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