After going to market on 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 It had a demand almost triple the amount offered. Other countries rated BBB are Indonesia, Hungary and Italy. The plan of the Government of President Andrés Manuel López Obrador to increase debt and finance more spending during this election year.
“Favorable financial conditions were obtained, which translate into a lower financial cost for the country compared to previous months,” the Treasury said in a short statement. “The transaction not only improves the liquidity and efficiency of the dollar bond yield curve, but also establishes a positive precedent for future Mexican issuers from the public and private sector throughout the year,” the agency added.
The bonds were placed in three tranches: 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 5% coupon for an amount of 1,000 million of dollars; a 12-year bond that will pay a rate of 6.09%, 30 basis points cheaper than a year ago, with a 6% coupon 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 $2.5 billion.
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