Mexico

Emerging market investors are enjoying an excellent start to the year in the secondary market, but primary supply has not maintained its strong start to the year. Bankers and investors are confident that issuers will get moving soon though.

Non-bank lender Crédito Real will show how far investor appetite for Mexican risk stretches as it looks to become the first sub-investment grade borrower from the country to issue in international bond markets in nine months.

Mexico’s new head of public credit, Gabriel Yorio, has told GlobalCapital investors were receptive to the government’s messages, after it received hefty demand for its first bond issue since Andrés Manuel López Obrador took office as president on December 1.

Latin American bond bankers were urging issuers to head to market on Thursday after Mexico and Uruguay emphatically showed there was strong appetite for new paper.

Bond buyers gave Mexico’s new government a vote of confidence on Wednesday as they piled into the first bond deal from the sovereign since Andrés Manuel López Obrador (Amlo) became president.

Syndicate bankers say that larger than normal new issue concessions being paid by US investment-grade corporates in bond markets mean Latin American borrowers are in no rush to get the year started.

Mexico’s new president Andrés Manuel López Obrador (Amlo) is free to proceed with his proposed cancellation of Mexico City’s new airport after bondholders agreed to waive clauses that would have triggered an event of default.

Battling a host of problems — local and global — Latin American bond markets suffered a torrid 2018. Many issuers stayed away, high yielders struggled to find financing and investors booked losses. With more volatility expected, political developments in LatAm’s three largest economies could make or break the region’s bond markets in 2019. Oliver West reports.

Bond and currency markets rallied on Monday after Mexico’s new president Andrés Manuel López Obrador (Amlo) presented a budget that Fitch said marked a continuation of Mexico’s existing fiscal framework.

Mexico City Airport Trust (Mexcat) offered an improved deal to bondholders this week as it seeks to make the documentation changes necessary to allow it to cancel its Texcoco airport project, but analysts said the new government has a long way to go before regaining the trust of markets.

Bondholders were never going to be satisfied with Mexico’s new government after it cancelled the airport project in which they’d invested $6bn. But though the issuer’s tender offer and consent solicitation is unlikely to be the administration’s last squabble with markets, it is still a good sign.

Mexico’s finance ministry showed it was willing to listen to investor concerns with a new improved tender offer from Mexico City Airport Trust (Mexcat), but for some bondholders at least it will not be enough to persuade them to participate.