Mexico tapped the Japanese bond market for the first time in two years, raising ¥152.2 billion ($1.04 billion) in a five-part sale of sustainable development bonds, according to the finance ministry.
The deal places Mexico as the largest sovereign issuer of sustainable notes in the Samurai market, the ministry said Thursday in a press release.
A total of 46 institutions participated in the transaction, of which 63% consisted of banks and insurers from the region and Japanese investment funds, with the remaining 37% coming from other regions, the ministry said.
“This achievement reinforces the risk management and currency diversification strategy in the public debt portfolio, taking advantage of favorable financing conditions,” it said.
The sovereign priced ¥97.1 billion worth of three-year notes at a fixed coupon of 1.43% and a yield of 95 basis points over the Tokyo Overnight Average Rate (Tonar), IFR News reported.
The government also issued ¥32.2 billion in five-year bonds at 1.72% and a yield of 115 basis points over Tonar along with ¥10 billion in 10-year notes at 1.83% with a spread 120 basis points over Tonar, the newswire said.
It also printed ¥8.3 billion in 10-year bonds at 2.27% and a yield of 140 basis points over Tonar mid-swaps and ¥4.6 billion in 20-year bonds at 2.93% and a spread of 155 basis points, IFR wrote.
Daiwa Capital Markets, Mizuho, Nomura and SMBC Nikko were joint bookrunners on the Reg S offering, the report said.
Mexico previously raised ¥75.6 billion in a five-part sale of samurai sustainable bonds in April 2022.
PESO BONDS
The Finance Ministry said in a separate release that it raised MXN23 billion ($1.18 billion) in a sale of ESG bonds in the local market.
The ministry placed MXN11.6 billion in two-year notes, MXN6.05 billion in four-year notes and MXN5.28 billion in six-year notes, it said. The 2026 bonds priced at 0.1125%, the 2028s at 0.1945% and the 2030s at 0.2174%, the ministry said.
This issuance is part of the ministry’s BondESG program, which aims to spur the issuance of ESG bonds in the local market and allow for “greater mobilization of resources towards sustainable projects,” it said.
Demand for the bonds reached MXN 56.78 billion, equivalent to 3.14 times the amount sold. Around 22 national investors participated in the deal, the ministry added.
In May, Mexico’s finance ministry raised MXN25 billion in its first sale of ESG bonds in almost two years.