The United Mexican States, or Mexico (MEX), yesterday priced its two-tranche issue in euros as follows:
- Tranche A: A new EUR 1.25% senior unsecured bonds due 2030 (A3/BBB+/BBB) with a coupon of 1.125% and a re-offer price of EUR 98.915 to yield 1.241% or MS + 105 bps; and
- Tranche B: A tap of the sovereign's currently outstanding 2.875% bonds due 2039, priced at EUR 113.85 to yield 2%.
Both tranches priced within guidance – yesterday, the pricing reference for the new 2030 bonds was mid-swaps +105bps to +110bps with the guidance for the tap in the WPIR 2.00-2.05% area. We believed the final price would converge to where the outstanding bonds were trading, offering little-to-no concession for the tap.
We reiterate our Hold recommendation on the Mexican credit curve.