Mexico Taps Samurai Investors for $820m

Mexico has raised JPY80.6bn ($822m) through a triple-tranche Samurai issue, marking its second non-JBIC guaranteed bond in the Japanese market. In the largest unguaranteed Samurai offering since 1997, the deal attracted more than 50 Japanese accounts from a diversified investor base and locked in better spreads than last year’s Samurai issue. It sold a 2016 JPY48.6bn tranche at par with a 1.16% coupon to yield Yen swaps plus 80bp, in line with guidance but on the wider end of 60bp-80bp initial price thoughts. A 2018 JPY15bn tranche was priced at par with a 1.39% coupon to yield Yen swaps plus 88bp, in line with guidance, and within 70bp-90bp initial thoughts. Sufficient reverse inquiry allowed the Baa1/A-rated deal to include a JPY17bn 2019 at par with a 1.54% coupon to yield Yen swaps plus 93bp, said to be the longest tenor sold in the Samurai market this year. The bond follows Japanese investor meetings earlier this month, with Daiwa, Mizuho and Nomura managing. Falling into Mexico’s medium- to long-term investment program, Japanese investors represent an increasingly important market for diversification, after the USD and EUR bond markets. Last year’s sale made Mexico the first triple-B rated borrower to issue a Samurai bond without JBIC support. It placed a dual-tranche JPY80bn 3- and 5-year bond. The sovereign priced a JPY50bn 2015 tranche at par with a 1.29% coupon, to yield Yen swaps plus 89bp, and a JPY30bn 2017 at par with a 1.56% coupon, to yield Yen swaps plus 110bp. Mexico follows a JPY24bn bond debut by Chile’s BancoEstado, which was priced in June.