Femsa Follows Mexican Billionaire Carlos Slim in Euro Debt Debut

  • Company sold 1 billion euros in bonds in debt European sale
  • Third Mexican company to issue euro bonds since last Monday

Fomento Economico Mexicano SAB sold euro-denominated debt for the first time on Monday, joining a wave of Mexican borrowers tapping the market as the European Central Bank starts buying investment-grade company debt.

Femsa, which owns Latin America’s largest convenience-store chain as well as a stake in Heineken NV, sold 1 billion euros ($1.1 billion) in seven-year bonds on Monday at a yield of 1.82 percent, according to data compiled by Bloomberg. The bonds yield 1.96 percentage point more than the 2023 German Bund. 

The sale follows euro debt issuance last week by billionaire Carlos Slim’s America Movil SAB and state-owned Petroleos Mexicanos. Investment-grade Mexican companies are tapping Europe as central bank President Mario Draghi expands the institution’s asset-purchase program to include corporate bonds.

While the spread and yield on the bonds were unexciting, Femsa is a “company that appears to be in the right place at the right time in terms of both strategy and business cycle” Rafael Elias, head of emerging-market strategy for Cantor Fitzgerald & Co., said in a e-mailed note to clients. “I do like it from a fundamental perspective."

For Femsa, the company with highest weighting on Mexico’s benchmark stock index, it’s the first debt sale in euros. Fitch Ratings ranked the bonds A, the sixth-highest investment grade.

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