Low Mexican Rates to Lure Issuers

More foreign issuers are likely to try to tap the local Mexican markets in coming months given the attractiveness of the rate and swap environment, Ricardo Velazquez, managing director of the financial institutions group at Banorte-IXE, tells LatinFinance. “Rates are on the decline and the market has discounted some of that,” adds Velazquez. “We have never seen these kinds of rates and it is very stable.” This comes after recent MXP issues from several European banks as well as Chile’s Banco de Credito e Inversiones (BCI). Mexico’s interbank rate TIIE was being quoted at around 4.75% Friday, but according to Velazquez was recently as low as 4.60%. Since mid-August though, issuance has been slow, with Pemex recently putting off a domestic sale that could have reached MXP15bn ($1.16bn) in size. Others awaiting issuance include Ford Credit, Banco Compartamos and ICA, but bankers are able to give little indication of when the pipeline is likely to resume.