Mexico set the tone for global emerging-market issuance in 2025 with a record-breaking $8.5 billion triple-tranche US dollar bond that combined scale, precision and impeccable timing. Executed in the first full week of the year, the transaction, which wins the award for Sovereign Bond of the Year, not only became the largest bond issuance in the country’s history, but also the largest ever by a Latin American investment-grade sovereign — and one of the most consequential sovereign trades of the past decade.
The deal was launched on January 6 into a constructive but far from complacent market backdrop. US equities opened the year modestly higher, credit spreads were slightly tighter and US Treasuries were stable, even as investors digested signals that the Federal Reserve might pause rate cuts amid persistent inflation and mounting geopolitical risks. Against that backdrop, Mexico moved decisively, becoming the first Latin American issuer to access the international bond markets in 2025.
The transaction was structured as senior unsecured global notes across three maturities, offering investors liquid benchmarks along the curve. Initial price thoughts were deliberately set wide — approximately 40 basis points back of fair value — at around T+210 basis points for the long five-year tranche, T+260 basis points for the long 12-year, and T+290 basis points for the long 30-year. The strategy was clear: build size and quality in a busy issuance window without leaving value on the table.
That approach paid off. Despite competing supply from both US investment-grade issuers and other emerging-market borrowers, demand strengthened steadily through the morning. As the quality of the orderbook improved, guidance was tightened meaningfully to around T+170, T+230 and T+255 across the three tranches, signaling confidence in execution and allowing syndicates to focus on optimal sizing.
By peak, the combined orderbook reached approximately $32.5 billion — more than five times oversubscribed relative to the original $6 billion baseline — with participation from more than 400 accounts and a notable concentration of large real-money orders. Seventy-three individual orders exceeded $100 million, giving the issuer unusual flexibility to upsize without compromising book integrity.
That flexibility proved decisive. Mexico increased the final size to $8.5 billion, allocating $2 billion to the long five-year tranche, $4 billion to the long 12-year, and $2.5 billion to the long 30-year. Final pricing reflected the strength of demand: the five-year tranche priced at 6.124%, the 12-year at 6.926%, and the 30-year at 7.408%. Spreads tightened by approximately 40, 30 and 35 basis points from initial price thoughts, respectively, resulting in minimal new-issue concessions across the curve.
“The decision to upsize the transaction was driven by exceptionally strong investor demand in the early stages of the book-building process across all three tranches,” says María del Carmen Bonilla, Mexico’s deputy finance minister.
The quality of demand was as important as its scale. Allocations were dominated by long-term institutional investors, including asset managers, pension funds and central banks, with strong participation from investment-grade crossover accounts. Geographic distribution was broad, reinforcing Mexico’s standing as a core sovereign holding rather than a tactical emerging-market allocation.
“The strong demand reflected Mexico’s well-established macroeconomic framework, prudent fiscal management and track record of consistent and transparent communication with global investors,” Bonilla says.
Beyond execution, the transaction carried substantial strategic weight. It marked Mexico’s first international bond issuance following the inauguration of a new presidential administration in late 2024, providing an early and unequivocal vote of confidence from global investors. It also effectively reopened the primary market for Latin American sovereign risk, setting a benchmark that subsequent issuers would reference throughout the year.
Proceeds were allocated to general government financing needs, providing fiscal flexibility at the outset of the year. The inclusion of a 30-year tranche, meanwhile, signaled long-term confidence in Mexico’s economic trajectory and reinforced the depth of its yield curve at the long end.
The deal’s success was amplified later in the year, when Mexico returned to the market repeatedly in both dollars and euros. But the January transaction remained the anchor. It established credibility, pricing discipline and investor momentum that subsequent trades would build upon.
By combining exceptional size, aggressive yet controlled pricing, and flawless execution in a competitive and uncertain environment, Mexico’s $8.5 billion triple-tranche bond set a new benchmark for emerging-market sovereign issuance.
United Mexican States $8.5bn Triple-Tranche Senior Notes
Joint Bookrunners: BofA Securities; Goldman Sachs; JP Morgan; Scotiabank; SMBC
Counsel to Issuer: Cleary Gottlieb
Counsel to Bookrunners: Ritch Mueller; Sullivan & Cromwell