DF Lands Oversubscribed Retap

The government of Distrito Federal has raised MXP2bn through a 2.1x oversubscribed dual tranche re-opening. A banker on the deal says both tranches priced 10bp inside guidance. The MXP500m floating rate tranche pays TIIE flat, while the fixed rate tranche for MXP1.5bn pays Mbonos plus 105bp. The maturities are for 4 years 8 months and 9 years 8 months respectively. Around 40 accounts participated, including Afores, insurers, mutual funds and private banks. The bonds are rated AAA on a national scale, with the funds destined for public works. Part of the proceeds will go towards financing Line 12 of the subway system, according to a banker at the lead. The bonds were sold though a trust using a structure in which the federal government is technically the issuer, since DF is not permitted to sell bonds on its own. Interest on the debt will be serviced by federal tax disbursements earmarked for the capital. Deutsche was the lead. DF raised MXP2bn in the June sale, after receiving MXP8.7bn in orders. The MXP900m 2015 tranche paid TIIE plus 14bp, while the MXP1.1bn 2020 portion offered Mbonos plus 90bp.