Homebuilder Bond Slump Signals Buy to Scotia: Mexico Credit
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Mexican homebuilders’ bond yields are rising as much as four times faster than that of corporate peers, prompting Citigroup Inc. and Scotia Capital to recommend buying the debt as a bet subsidies will help the companies weather slowing growth.
The yield on dollar bonds due in 2020 sold by Urbi Desarrollos Urbanos SAB, Mexico’s third-biggest homebuilder, jumped 87 basis points this month to 8.29 percent, according to data compiled by Bloomberg. Mexican companies’ borrowing costs rose 10 basis points, or 0.1 percentage point, during the same period to 6.33 percent, JPMorgan Chase & Co. indexes show. Emerging-market corporate bond yields climbed 10 basis points.