Mexican companies from America Movil to Petroleos Mexicanos are becoming the biggest sellers of international bonds in Latin America as they take advantage of record-low borrowing costs.
Debt sales have totaled $10 billion in the past three months, almost double the $5.3 billion from Brazilian companies, according to data compiled by Bloomberg.
The average yield on dollar-denominated Mexican corporate bonds fell 0.64 percentage point in that span to 5.6 percent, the lowest since JPMorgan Chase & Co. began tracking the data in 2001.
Demand for debt from Mexican companies is soaring as the nation's economic growth outpaces that of Latin America for the first time in more than a decade and the bonds offer yields that are higher than in the United States or Europe.
While wireless carrier America Movil sold 250 million Swiss francs ($261 million) of bonds due in 2018 on Aug. 15 to yield a record low 0.68 percentage point above the mid-swap rate, no Brazilian company has issued debt abroad since July 30.
"Investors are getting more excited with Mexico relative to Brazil in the last few months," Joe Kogan, head of emerging- market debt strategy at Scotia Capital Markets, said in a telephone interview from New York.
"It creates an environment that encourages offerings." America Movil, the Mexico City based-carrier controlled by billionaire Carlos Slim, is the country's biggest seller of debt abroad this year, raising $5.6 million, data compiled by Bloomberg show.It sold $5.4 billion in the past three months.
America Movil didn't return e-mails seeking comment. Press officials at Pemex, as Mexico's state-owned oil producer is known, didn't respond Thursday to an e-mail seeking comment.
The company has sold $2.95 billion of debt in the past three months. The yield on Pemex's $1.75 billion bonds due in 2044 fell to 4.95 percent yesterday from 5.3 percent on June 19, when it issued the securities. Similar-maturity U.S. Treasuries yield 2.73 percent.
Latin America's second-biggest economy will grow 3.7 percent this year as it benefits from a rebound in the U.S., compared with 2.89 percent for the region and 1.9 percent in Brazil, according to the median forecasts of analysts surveyed by Bloomberg.
Mexico sends about 80 percent of its exports to the U.S. Mexico's economic expansion is prompting companies to issue debt to finance expansion, according to David Spegel, the head of emerging-markets strategy at ING Groep. "Mexico is tied to the U.S.," Spegel said in a telephone interview from New York. "Issuers need the money."
montereyherald.com
Debt sales have totaled $10 billion in the past three months, almost double the $5.3 billion from Brazilian companies, according to data compiled by Bloomberg.
The average yield on dollar-denominated Mexican corporate bonds fell 0.64 percentage point in that span to 5.6 percent, the lowest since JPMorgan Chase & Co. began tracking the data in 2001.
Demand for debt from Mexican companies is soaring as the nation's economic growth outpaces that of Latin America for the first time in more than a decade and the bonds offer yields that are higher than in the United States or Europe.
While wireless carrier America Movil sold 250 million Swiss francs ($261 million) of bonds due in 2018 on Aug. 15 to yield a record low 0.68 percentage point above the mid-swap rate, no Brazilian company has issued debt abroad since July 30.
"Investors are getting more excited with Mexico relative to Brazil in the last few months," Joe Kogan, head of emerging- market debt strategy at Scotia Capital Markets, said in a telephone interview from New York.
"It creates an environment that encourages offerings." America Movil, the Mexico City based-carrier controlled by billionaire Carlos Slim, is the country's biggest seller of debt abroad this year, raising $5.6 million, data compiled by Bloomberg show.It sold $5.4 billion in the past three months.
America Movil didn't return e-mails seeking comment. Press officials at Pemex, as Mexico's state-owned oil producer is known, didn't respond Thursday to an e-mail seeking comment.
The company has sold $2.95 billion of debt in the past three months. The yield on Pemex's $1.75 billion bonds due in 2044 fell to 4.95 percent yesterday from 5.3 percent on June 19, when it issued the securities. Similar-maturity U.S. Treasuries yield 2.73 percent.
Latin America's second-biggest economy will grow 3.7 percent this year as it benefits from a rebound in the U.S., compared with 2.89 percent for the region and 1.9 percent in Brazil, according to the median forecasts of analysts surveyed by Bloomberg.
Mexico sends about 80 percent of its exports to the U.S. Mexico's economic expansion is prompting companies to issue debt to finance expansion, according to David Spegel, the head of emerging-markets strategy at ING Groep. "Mexico is tied to the U.S.," Spegel said in a telephone interview from New York. "Issuers need the money."
montereyherald.com
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