Mexico issues 7.5 billion dollars in debt and becomes the largest global issuer among its peers

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The Ministry of Finance confirms that the country is now “the largest sovereign issuer with a BBB rating globally”

The Ministry of Finance and Public Credit (SHCP) of Mexico announced on Tuesday night that it made its “largest debt placement in recent history” in international markets. The country placed 7.5 billion dollars in sovereign bonds as part of President Andrés Manuel López Obrador’s plan to increase debt and finance more spending during this election year. With this, the country becomes “the largest sovereign issuer with a BBB rating globally”, the agency assures.

Last Tuesday, Mexico becomes the largest sovereign issuer with a BBB rating, considered the lowest grade within the investment category by the largest credit risk agencies in the world, according to the Ministry of Finance, and had a demand of almost triple the amount offered. Other countries rated as BBB are Indonesia, Hungary and Italy.

“Favorable financial conditions were obtained, which translate into a lower financial cost for the country compared to previous months,” Finance said in a short statement. “The transaction not only improves the liquidity and efficiency of the yield curve of the dollar bonds, but also establishes a positive precedent for future Mexican issuers from the public and private sector throughout the year,” he adds.

The bonds were placed in three tranches: one to five years 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 1,000 million dollars; 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 4,000 million dollars; 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 of last year, coupon of 6.4% for an amount of 2,500 million dollars.

Source: El Pais