Flash Fixed Income Report /
Mexico

Mexico's euro-denominated bonds – priced tight

    Rafael Elias
    Rafael Elias

    Director, Latin America Credit

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    Tellimer Research
    14 January 2020
    Published byTellimer Research

    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.