Mexico City.- Mexico placed the equivalent of 1.05 billion dollars in sustainable bonds in the Samurai market with terms of three, five, seven, 10 and 20 years, the Ministry of Finance reported on the operation, which was closed yesterday, agencies reported.
In a statement, the Treasury Department said the new instruments, aligned with the UN Sustainable Development Goals (SDGs), will pay coupons of 1.43, 1.72, 1.88, 2.27 and 2.93 percent, respectively.
“The total amount placed was 152.2 billion yen (equivalent to 1.05 billion dollars). The transaction had the participation of 46 investors, of which 63 percent corresponded to regional banks, cooperative insurers and Japanese funds. The remaining 37 percent came from other regions.” Mexico set the price of the Samurai bonds on Thursday, showing that there is investor demand in Japan for riskier debt, particularly for shorter terms.
Yen credit spreads have widened slightly in recent weeks as market volatility has increased amid uncertainty over whether the Bank of Japan will raise interest rates again after doing so twice this year.
The Mexican government paid a spread of 95 basis points on the three-year bond. By comparison, Indonesia, which has similar “BBB” level debt ratings to Mexico, paid a 50 basis point yield premium when it carried out a Samurai bond deal in May. Mexico has been keen to diversify its sources of external debt and has sold yen bonds roughly every two years; the previous issuance was in 2022.
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