Mexico raises USD1.8bn in first Samurai bond sale in two years

MEXICO CITY: Mexico raised 282.8 billion yen (USD1.77 billion) from a four-part Samurai bond, fixed-income news service IFR reported on Friday, returning to Japan’s bond market for the first time in two years with an issue that drew solid demand despite pressure on its credit ratings.

The sovereign sold 3.5-year, five-year, 10-year and 20-year notes, all structured as Sustainable Development Goals bonds. Proceeds will support general budgetary spending and social and development expenditures under the 2026 federal budget.

The offering was the second-largest yen bond sale of the year, behind Alphabet’s 576.5 billion yen deal in May. Bankers told IFR demand was concentrated in the shorter maturities, but the final size still surpassed expectations even as some investors remained wary of Mexico’s lower-end investment-grade ratings.

Mexico paid a premium to its secondary US dollar curve, a banker involved told IFR: more than 30 basis points on the 3.5-year and five-year tranches, around 15 basis points on the 10-year, and nearly 20 basis points on the 20-year.

The 177.3 billion yen 3.5-year tranche priced at Tonar mid-swaps plus 115 basis points; the 87.2 billion yen five-year at plus 140 basis points; the 1.2 billion yen 10-year at plus 170 basis points; and the 17.1 billion yen 20-year at plus 210 basis points.