Mexican companies are tapping the local bond market at a record clip, with long-term issuance for non-bank companies reaching 234.8 billion pesos ($13 billion) through September, up 14% from last year and the highest annual volume since Banorte began compiling data in 2004.
Lower interest rates, looming maturities and a growing pool of institutional capital are driving the surge. "We’re noticing a great deal of openness among investors to these placements," said Yazmín Matus, deputy director of debt markets at VALMEX Casa de Bolsa. The strong appetite has often allowed issuers to price at tighter spreads than initially anticipated.
The flurry of activity comes after issuers stayed on the sidelines last year amid trade uncertainty. With maturities looming for large borrowers including state-owned oil company Petroleos Mexicanos, companies have turned to the domestic market. Recent offerings from electricity commission CFE (20 billion pesos) and Grupo Lala (9 billion pesos) added to year-to-date volumes.
"It used to be difficult to issue, say, 10 billion in Mexico," said René Robles, a director and credit analyst at Moody's Local Mexico, but now that's not the case, pointing to the "unprecedented" Pemex issuance. Banorte expects the accelerated pace to continue through October and November, driven by heavy maturities and seasonal activity.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing