Mexico

Mexican duo Pemex and América Móvil headed to Europe to raise financing this week, becoming the first corporates of the year to join the trend of Latin American borrowers selling euro denominated debt.

Cemex tightened its latest deal by over 50bp from initial price thoughts as the Mexican cement company was rewarded for a conservative starting strategy with a well-oversubscribed book.

State-owned oil giant Pemex became the second Mexican company to raise euro denominated debt this week, following the same strategy it took in dollars earlier in the year by focussing on the short end of the curve.

Emerging market investors have plenty of opportunity to pick up corporate debt this week with Mexican oil and gas giant Petroleos Mexicanos (Pemex) returning to euros and Koc Holding in dollars.

Mexican cement firm, Cemex has persuaded its banks to change the leverage covenants on its $1.9bn credit facility after its business suffered in the wake of exchange rate volatility and crashing oil prices.

Mexican telecoms giant América Móvil become the first private sector firm from Latin America to issue international bonds on Monday, raising €1.5bn of euro-denominated paper with a tighter new issue premium than most of the region’s sovereigns have managed recently.

América Móvil, the Mexican telecommunications firm, took advantage of a rally in emerging market debt to open books on its debut euro-denominated bond with a tight concession on Monday.

Fomento Económico Mexicano (Femsa) has mandated three banks for its debut euro denominated bond, which it will roadshow next week around the European Central Bank policy meeting.

Bolsa Mexicana de Valores, the only exchange in Mexico and the second largest in Latin America, expects growth in derivatives revenues and has retained bullish ratings from bank analysts as a result.

Bond bankers expect European investors will have more Latin American sovereigns to occupy them in the future, after Mexico showed that very low yields are still on offer in euros for those issuers that choose not to hedge their currency exposure.

Three positive days in markets pushed Mexico to sell its second deal of the year on Tuesday as Latin America sovereigns become more pragmatic about choosing issuance windows.

Mexico is looking to sell its fifth euro denominated bond in four years after releasing initial price thoughts for six and 15 year tranches on Tuesday.