Mexico Awaits Samurai Feedback

A Samurai bond without a JBIC guarantee is still on the cards for Mexico, but it appears that timing could be pushed back given the unease pervading market sentiment. “For us this is a medium-term strategy,” Alejandro Diaz de Leon, the country’s head of public credit, told LatinFinance on the sidelines of the IMF meetings in Washington over the weekend. “We want to have Japanese investors as a regular part of our external portfolio. We are committed to that but we are mindful of market conditions and clearly don’t have a particular deadline for that transaction.” Mexico has been engaging Japanese accounts about the idea of issuing a bond without a JBIC guarantee, marking the next natural step for a sovereign that has already sold debt in Japan with the support of the public financial institution. This time it is heard eyeing a tenor in the 5-year range. Up until now, Mexico has sought longer maturities but with the aid of a JBIC guarantee, most recently selling JPY150bn ($1.8bn) of 10-year bonds at a 1.51% yield in October. “We still haven’t received the final feedback from investors. In the next week we will have a clearer picture in that regards. For us it is clearly on the table and it is a question of when we can do it in a way that all parties involved feel successful about the transaction,” Diaz said.