MEXICO (Bloomberg).- Lopez Obrador´s new government made a successful transaction in the international financial markets, offering $2 billion of 10-year debt to yield 185 basis points more than similar-maturity Treasuries, according to the Finance and Credit Ministry
The sale follows a positive reception for $17.1 billion of debt sold already this year by Indonesia, the Philippines, Saudi Arabia, Turkey and Uruguay. It also comes at an auspicious moment for Mexico, with asset prices rebounding from last year’s slump triggered by the arrival of Lopez Obrador and his decision to cancel the $13 billion USD airport project in Mexico City.
Mexican bonds Image: Bloomberg
Lopez Obrador, well-known left-wing agitator in the past, has calmed investors in late December with a well-conventional budget proposal and a deal with airport bondholders. Interest-rate spreads have narrowed globally this month as investors bid up bonds on wagers that the Federal Reserve will slow interest rate increases and the U.S. and China will reach an agreement to avoid an all-out trade war.
Mexico’s paid a smaller premium of 135 basis points over Treasuries at its last 10-year debt sale, in January 2018 under President Pena Nieto. The 50 basis point increase in borrowing costs is still less than the average for investment-grade emerging-market sovereigns during that span.
Source: Justin Villamil (Bloomberg)
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