When each new year rolls around, there’s one sovereign that markets reliably expect to be among the first anywhere to tap the international bond market: Mexico.
It did so again in 2024, while also setting new domestic and international records for yet another year. The $7.5 billion sovereign bond was the largest SEC-registered bond in history and by far the largest issued by the sovereign.
“We always want to take advantage at the beginning of the year, presenting what Mexico has to offer to investors,” says Edgar Amador, the country’s deputy finance minister. “Mexico is very attractive to investors in an international context of uncertainty and volatility.”
While the landmark triple-tranche U.S. dollar bond was the largest, it was hardly Mexico’s only notable issuance of the year. The sovereign also set precedents by tapping the euro and yen markets during the year with SDG bonds.
The January bond won LatinFinance’s Sovereign Bond of the Year award and country’s multiple issuances also secured Mexico Sovereign Issuer of Year award.
The sovereign bond in dollars was originally planned for $5 billion, but was upsized to the final $7.5 billion because of demand. The previous record by the sovereign was its $6 billion emission in 2020.
This was the largest transaction by a BBB-rated sovereign this century. It was oversubscribed by 2.8 times and nearly 400 investors were lined up when it closed on January 2.
It was done in three tranches, with a $1-billion tranche with a 5% coupon maturing in 2029, a second for $4.5 billion with a 6% coupon due in 2036, and the third for $2.5 billion at 6.4% for 30 years.
Barclays, Bank of America, JPMorgan, Morgan Stanley and Santander were joint bookrunners on the deal.
Amador says the appeal of Mexican bonds has increased in recent years thanks to what he sees as a belief among investors in the country’s trustworthiness, its solid macroeconomic fundamentals and its creativity, tapping different markets in different formats.
“The Mexican economy and Mexican ratios are perceived as very high quality by investors,” notes Amador. “Our economic management, and our financial and fiscal ratios, are seen in a favorable light.”
The sovereign returned to the market for a second time in January 2024, with a
2 billion euro bond ($2.07 billion) and then in August with a Samurai bond for 152.2 billion yen ($1.04 billion). Both were SDG bonds.
As with the U.S.-dollar bonds, the euro and yen bonds also established records for the sovereign.
The euro-denominated issuance, due in 2032, launched on January 18 with a 4.48%. It was oversubscribed more than three times. Joint bookrunners include BBVA, Citi, Deutsche Bank, HSBC and Natixis.
It marked Mexico’s return to the euro market after a two-year absence and was the sovereign’s largest euro issuance in the SDG format.
That format was also used with the sovereign’s samurai bond issued last August. It was Mexico’s first venture into the yen market for more than two years. The $1.04 billion bond was issued in five tranches maturing in 3, 5, 7, 10 and 20 years, and with coupons of 1.43%, 1.72%, 1.88%, 2.27% and 2.93, respectively.
Daiwa Capital Markets, Mizuho, Nomura and SMBC Nikko were joint bookrunners on the transaction.
The transaction made Mexico the largest SDG issuer in yen after Japanese sovereign, according to the finance ministry.
Amador says the euro and yen bonds, together with the government’s BondESG program launched in 2022 for the local market, set Mexico apart from other sovereigns in the ESG space.
On a broader front, he says the decision to tap the dollar, euro and yen markets corresponded to the sovereign’s ongoing efforts to diversify its public debt, which was 82.7% internal and the 17.3% external, according to the final 2024 bulletin from the Ministry.
“We have an important level of diversification in foreign currency liquid markets with dollar, euros and yen,” he says.
The sovereign continued its record-breaking streak in 2025 with an eye-popping $8.5-billion issuance on January 6 that helped cover most of its financing needs for the year.
Mexico’s public debt-GDP ratio was approximately 51% at the end of 2024, up from an average of 48.25% over the previous four year. It which is better than the other two big region economies Argentina and Brazil, with debt-GDP ratios of 86.2% and 87.6%, respectively, according to the International Monetary Fund.
Issuer’s Counsel: Cleary Gottlieb
Counsel to Underwriters: Ritch Mueller, Sullivan & Cromwell
Joint Bookrunners: Barclays; BofA Securities; JP Morgan; Morgan Stanley; Santander
All supporting financial institutions and law firms were transmitted to LatinFinance by the award category winners. For updates please email awards@latinfinance.com