Mexico Refinances To Cut Costs, Improve Liquidity

Mexico cut the costs of its debt financing by issuing $3 billion of new global bonds, Friday, to buy back $2.9 billion of higher-coupon foreign-currency bonds maturing between 2007 and 2031. The refinancing was well below the $5 billion expected by the market, surprising analysts who had anticipated greater demand. The new global bonds, due 2017, were sold at a yield of 5.736% and a coupon of 5.625%. As well as reducing its debt servicing costs, Mexico is looking to improve liquidity of its bond market by buying back lesser-traded instruments and providing the country’s largest foreign-currency benchmark bond to date. The deal was managed by Goldman Sachs and Morgan Stanley.