Mexico’s sale of yen-denominated bonds will be the country’s last overseas debt offering this year, said Gerardo Rodriguez, head of the finance ministry’s public debt unit.
The government plans to raise about 150 billion yen ($1.8 billion) of 10-year Samurai bonds as early as Oct. 20, a person familiar with the transaction said. The bonds may be priced to yield 50 basis points to 65 basis points more than the yen swap rate, said the person, who asked not to be identified because the information is private.
The sale will happen before the end of the month, Rodriguez said, declining to provide details. Mexico has sold more than $4.2 billion in euro and dollar debt this year to take advantage of record low yields. Yesterday, the government sold $1 billion of 100-year bonds, the first debt with that length maturity by a Latin American government.
“We had many opportunities this year,” Rodriguez said. “With this sale, we would complete all our market operations.”
Mexico begun studying issuing 100-year bonds about year ago and made a decision after Rabobank Nederland NV and Norfolk Southern Corp. sold similar maturity debt in the last two months, Rodriguez said.
The government wanted to take advantage of record low yields to fund operations, he said. The yield on Mexico’s 5.125 percent dollar debt due in January 2020 fell to a record low of 3.607 last week.
“There are few times when all the different elements align themselves to allow a transaction like this. This will lead other issuers to 100-year bonds,” Rodriguez said. “It would be very normal for people to start considering these bonds.”