Mexican Government Seeks to Diversify Overseas Bond Sales

Mexico may sell bonds in dollars, euros and yen this year under a plan to ensure it can tap any of the markets when needed, said Alejandro Diaz de Leon, the country’s public debt chief.

The government is “reviewing” the euro-denominated debt market to see if conditions are ripe for a sale in that currency, Diaz de Leon said in an interview today at the National Palace in Mexico City after he helped give a presentation on the government’s financing plan for 2013.

“One fundamental objective of external debt financing is to diversify sources,” Diaz de Leon told reporters. Mexico last sold debt denominated in euros in 2010, according to data compiled by Bloomberg.

President Enrique Pena Nieto’s administration signed into law in December the nation’s first balanced budget since 2009 as he seeks to enforce what he says are responsible economic policies.

The federal government will have gross financing needs of 1.28 trillion pesos ($101.5 billion) in 2013, or about 7.7 percent of gross domestic product, according to the financing plan. That compares with 1.27 trillion pesos, or 8.1 percent, in 2012.

Most of the financing needs will be met in the local market, supplemented by global issuance to diversify the funding sources, the Finance Ministry said in a statement.

One sale of peso-denominated bonds this year will be handled through a syndicated auction, Diaz de Leon told reporters after the presentation. The country has no plans to issue debt at a maturity longer than 30 years in 2013, he said.

Net federal government debt as a percentage of GDP will total about 26.8 percent at the end of 2013, up from an estimated 26.4 percent at the end of last year, according to the financing plan.

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