Sovereign Liability Management of the Year: Mexico

Sovereign Liability Management of the Year: Mexico

Mexico surprised investors by going to the market in July just two weeks after former Finance Minister Carlos Urzúa resigned from office. The operation also came on the same day that the International Monetary Fund lowered Mexico’s 2019 economic growth forecast to 0.9% from 1.6%.

Mexican officials capitalized on a borrower-friendly rates environment to carry out a more than $3 billion liability management exercise -- one of the largest in recent years.

Still, Mexico moved ahead with a tap of its 2029 bonds and announced a new benchmark 2050 note.

After issuing $2.1 billion in new 30-year-notes and adding $1.46 billion to its 4.5% 2029 notes, Mexico repurchased or exchanged old debt that matures between 2019 and 2047. The country accepted $99.7 million in 2021 notes along with $1.28 billion in notes due in 2019 and 2026 and $1.18 billion in debt due between 2031 and 2047.

The bookrunners BBVA, Credit Suisse and Goldman Sachs priced $270 million of the 2039 retap to yield 3.738% and increased the size of the deal by around $1.18 billion as investors tendered the old notes. They also priced $1 billion in 2050 bonds to yield 4.552% and added $1.1 billion to cover the buyback.

Award accepted by: José Ramon, Director of External Credit, and José de Luna, Director of Public Credit

Sovereign Liability Management of the Year

Date: July 2019

Size: US$ 3.6 billion

Supporting Financial Institutions: BBVA; Credit Suisse; Goldman Sachs

Supporting Law Firms: Cleary Gottlieb; Sullivan & Cromwell; Ritch Mueller