July 1, 2002
Mexican transport company Transportación Ferroviaria Mexicana (TFM) reopened the US high yield market for Latin American companies in June when it issued $180 million in callable 10-year senior notes led by bookrunner Salomon Smith Barney. The issue carries a 12.5% coupon, offering investors a 12.75% yield-to-maturity and a spread of 770 basis points over 10-year US Treasurys, a pick-up of 500 basis points over Mexican government paper.
The deal was three times oversubscribed and increased from $170 million to $180 million. High yield US investors, disenchanted with the tide of negative corporate news at home, took the opportunity to buy some rare, high-yielding Mexican corporate
A Sub-investment grade Mexican railroad company took advantage of an openeing in the US junk bond market to issue $180 million worth of 10-year paper.