Mexico sold $1.5 billion of bonds abroad in the first sovereign offering this year, according to a person familiar with the transaction.
The country, which has Latin America’s biggest economy after Brazil, sold more of its 2044 debt to yield 1.1 percentage points above Treasuries, or 4.194 percent, said the person, who asked not to be identified because he wasn’t allowed to speak publicly. The yield on the bonds fell to 4.11 percent on Jan. 4 from 4.84 percent when they were first issued in March, according to data compiled by Bloomberg.
Investor demand for securities that offer higher yields than those that are available from developed markets is rising as central banks in Europe and the U.S. keep benchmark interest rates near zero. The extra yield investors demand to own Mexican debt instead of U.S. Treasuries has dropped to 149 basis points from 216 basis points a year ago, according to JPMorgan Chase & Co.’s EMBI index.
The offering was managed by Barclays Plc and JPMorgan Chase & Co., said the person. The deal attracted more than $3 billion of bids, according to Fadi Attia, a director of emerging markets debt syndicate at Barclays.
“Mexico is perceived as a great credit,” Carlos Corona, a director for Latin America debt capital markets at Barclays, said in an interview in New York “This is a great vote of confidence on the new administration and the government’s policy agenda.”
Companies have sold $41.8 billion of bonds this month, while no government has issued debt abroad so far, according to data compiled by Bloomberg.