UMS Launches Liability Management

Mexico has launched an exchange offer as it seeks to steer debt from a series of less liquid bonds into three benchmark maturities. “We want to exchange off the run bonds in exchange for three of the newest and most relevant on the run bonds – our 2022s, 2044s and our century bonds,” Alejandro Diaz de Leon, Mexico’s public credit head, tells Latin Finance. UMS is targeting six series of outstanding notes due 2013-2017 representing $10.4bn, and nine series due 2019-2040 totaling $18.6bn outstanding. The sovereign is offering bond holders of the first series to swap the old bonds for UMS’ reopened 3.625% 2022, 4.750% 2044 or 5.750% 2110, with accepting holders of the second series able to get reopened 2044s or 2110s. Holders will receive new bonds at a specific ratio plus a possible cash consideration, both varying depending on which specific securities are involved. UMS has not yet set a limit on how much debt it is willing to exchange. The offer expires August 20. Bank of America Merrill Lynch, Credit Suisse and Goldman Sachs are managing the process.