Mexico Takes Advantage of Multilats, Exims

Mexico looks to continue to take advantage of multilateral and export-import bank funding, Gerardo Rodriguez, its head of public credit says. With its external needs for the year taken care of through December and February issues, the sovereign will focus on balancing multilateral and domestic market sources. “The idea with multilaterals is to ramp up our programs as much as possible so that we can do some of the funding that we would otherwise do in the local market,” the official says. “These institutions are built to address difficult situations. This is the time to use them, and not the time to buy back or reduce external debt,” he adds. He explains Mexico is also reviving relationships with the export-import banks. Mexico’s exposure with these banks has been reduced in recent years, he explains, but the strategy now is to take advantage even more of such resources where funding is competitive and counter-cyclical. As for local markets, the sovereign will continue adjusting its own local issuance, while helping to open markets for high-quality private issuers. “Over the next couple of quarters, we expect, as market conditions permit, to continue increasing so that we can get to similar issuing amounts at the medium and long end of the curve, as those that we had before we scaled them back in October of last year,” he says. Rodriguez explains that feedback from a recent roadshow for state-owned oil producer Pemex has been good. The issuer is preparing a local bond, likely “short to intermediate” in tenor. A successful execution, could also be followed by a new issue from state utility CFE.