Mexico logs first cross-border bond sale of 2020

Mexico logs first cross-border bond sale of 2020

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

Mexico has become the first sovereign issuer from Latin America to issue bonds in the cross-border market in 2020, raising $2.55 billion from a two-part deal that was more than 3.5 times oversubscribed, sources told LatinFinance.

The Mexican government sold $1.75 billion in new 10-year notes with a coupon of 3.25% and also added $800 million to its 4.5% 2050 notes, said a source involved in the deal. 

The new 2030 notes priced at 99.468 to yield 3.312%, or 150 basis points over US Treasury notes, while the 2050 notes priced at 101.873 to yield 4.041%, or 175 basis points over US Treasury notes, the source said.

Investors placed a total of $9.4 billion in orders, with $6.1 billion for the 10-year paper and $3.3 billion for the 2050 notes, the source said. The bookrunners were BBVA, Citi, Credit Suisse and Goldman Sachs.

The bookrunners set the guidance on the 2030 notes between 150 basis points and 155 basis points over US Treasury notes, before launching the deal at 150 basis points. They also put the guidance for the 2050 retap between 175 basis points and 180 basis points over US Treasury notes and then launched the deal at 175 basis points, a second source said.

In July last year, when Mexico issued $2.1 billion in 2050 notes, it priced the 30-year paper to yield 4.552%. It also added $1.46 billion to its 4.5% 2029 bonds at a yield of 3.738%.

Mexico could expand its funding sources this year by issuing renminbi-denominated notes in the Chinese market and selling debt in other currencies, such as Swiss francs, as LatinFinance reported in July last year.

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