(Bloomberg) – Mexico will sell dollar bonds for the second time this year, taking advantage of the rebound in emerging market assets as investors regain their appetite for risk amid speculation about the global economic recovery.
The Latin American nation is offering global securities maturing in 2041 and expects to pay a 240 basis point spread over equivalent US Treasury yields, according to a person with knowledge of the matter. The country also launched an offer to exchange bonds with nine maturities between 2023 and 2040, according to a statement.
Bondholders have until 12pm ET and preferred offers have until 2pm to join the trade and can choose to receive the new bonds or a cash payment. The results of the exchange will be announced tomorrow.
The last time Mexico offered bonds in dollars was in January, when the nation sold $ 3 billion in notes due in 2071 with a coupon of 3.75%. Since then, bonds have fallen more than 8 cents, taking the yield from 3.9% to 4.3%. The notes cut some of their losses in recent weeks after US Treasury yields stabilized.
“The timing is right with better recent high-frequency economic news and, at first glance, the deal will further extend the average maturity of Mexican dollar bonds,” said Michael Roche, a strategist at Seaport Global Holdings in New York. “Any effort to manage liabilities that reduces the nearby payment burden contributes to improving credit.”
Roche also noted that most of the bonds that Mexico offers to buy in the public offering are at the steepest part of the yield curve, encouraging investors to move to longer maturities.
BBVA Securities Inc, BofA Securities Inc, Credit Suisse Securities (USA) LLC and JP Morgan Securities LLC will act as the main joint underwriters for the new note offering.
Original Note: Mexico Returns to Bond Market With Dollar Sale and Tender Offer
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