Mexico swaps local notes, extends maturities

Mexico swaps local notes, extends maturities

Bonds Debt Capital Markets Corporate & Sovereign Strategy Economy & Policy Fixed Income Mexico

Mexico's finance ministry said on Wednesday that it replaced MXN70.4bn ($3.58bn) in outstanding government bonds expiring through 2021 and extended the maturities as far as 2050.

The ministry, or SHCP, repurchased the notes that would have expired in 2019, 2020 and 2021 from foreign and local investors. It then auctioned MXN67.7bn in fixed-rate Mbonos and inflation-linked Udibonos with maturities between 2022 and 2050 after receiving MXN104bn in orders, the ministry said in a statement.

On the shorter end of the maturities, MXN20.6bn in new three-year Mbonos carry an interest rate of 6.86%, while MXN1.85bn in 30-year Mbonos pay 7.41%, according to a report from the financial services firm Banorte. For the Udibonos, MXN1.09bn in new 10-year bonds pay 3.24% and MXN542m in 30-year notes pay 3.49%, Banorte added.

The SHCP took advantage of a "positive moment" in the fixed-income market to extend maturities and refinance short-term debt, Banorte said.

Local institutional investors bought 81% of the new notes, while other local buyers took 15%, foreign investors acquired 3% and local banks got 1%, the firm said.

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