Mexico is returning to global debt markets to fund a bond buyback program, issuing new securities due in 2037 and reopening 2056 notes as credit-rating agencies intensify pressure over the nation's fiscal deficit. Initial price talk ranges from 220 to 225 basis points over Treasuries, according to sources familiar with the transaction.

The government will use proceeds to purchase dollar-denominated bonds maturing in 2027 and 2028, plus euro bonds due in 2029. This follows Mexico's record $41 billion issuance last year, primarily to support state oil company Pemex. In January, the country already sold $9 billion in dollar bonds and 9.5 billion euros in debt.

S&P Global Ratings revised Mexico's outlook to negative in May, citing persistent fiscal weakness and rising debt levels. Moody's Ratings followed by cutting Mexico to the lowest investment-grade tier, warning that continued Pemex support constrains the government's ability to control debt.

Barclays, BNP Paribas, Deutsche Bank Securities, HSBC, and MUFG are managing the deal. The buyback signals Mexico's attempt to reduce near-term debt obligations while maintaining investment-grade status that corporate borrowers depend on for lower financing costs.