The Ministry of Finance in Mexico announced on Tuesday night that it conducted its.
“largest debt issuance in recent history” in the international markets.
The country issued $7.5 billion in sovereign bonds as part of President Andrés Manuel López Obrador’s plan to increase debt and finance more expenses during this election year. As a result, the country becomes
“The government declared that it is the largest sovereign issuer with a BBB global rating.”
After Tuesday’s market sale, Mexico becomes the largest sovereign issuer with a BBB rating, considered the lowest investment-grade rating by the world’s largest credit rating agencies, according to Mexico’s Ministry of Finance, and had a demand nearly three times greater than the amount offered. Other countries with a BBB rating include Indonesia, Hungary, and Italy.
The Ministry stated in a brief statement that they have obtained favorable financial conditions, which translates into a lower financial cost for the country compared to previous months. They also added that the transaction not only improves the liquidity and efficiency of the dollar bond yield curve, but also sets a positive precedent for future issuers from the Mexican public and private sectors throughout the year.
The bonds were issued in three segments: a 5-year bond that will pay a rate of 5.07%, 37 basis points cheaper than in January 2023, according to the Ministry, with a coupon of 5% for an amount of $1 billion; a 12-year bond that will pay a rate of 6.09%, 30 basis points cheaper than a year ago, with a coupon of 6% for an amount of $4 billion; and a 30-year bond that will pay a yield rate of 6.45%, 11 basis points more expensive than the bonds issued in April last year, with a coupon of 6.4% for an amount of $2.5 billion.
