The governments of Mexico and Barbados and a subsidiary of Brazilian meatpacker JBS descended on the US bond market on Monday to raise a total of $8.5 billion for liability management, according to a source familiar with the deals.
Mexico tapped the bond market for the third time this year to raise $4.5 billion in a two-part sale that was roughly 3.7 times oversubscribed, the source said.
The country priced $2.5 billion in 5.85% long seven-year bonds at 99.949 to yield 5.859%, or 175 basis points over US Treasuries bonds, after opening the initial price talk in the 210 basis points area. It also priced $2 billion in 6.625% long 12-year notes at 99.848 to yield 6.642%, or 230 basis points over Treasuries, after opening the deal at around 265 basis points, the person added.
Investors placed as much as $16.5 billion in orders, split between $8.5 billion for the 2033s and $8 billion for the 2038s, according to the source.
Barclays, BBVA, Goldman Sachs, Mizuho and Morgan Stanley were joint bookrunners on the offering.
Mexico will use the proceeds from the bond sale to fund a new tender offer and the rest for covering the budget for this year.
BUYBACK OFFER
The government simultaneously launched an offer to repurchase a portion of the $9.59 billion outstanding on five series of global bonds maturing between 2027 and 2029 and a portion of the $8.81 billion outstanding on four series of global notes due between 2030 and 2031, the sovereign said in a press release.
In January, Mexico kicked off its 2025 fundraising program with a sale of $8.6 billion worth of bonds, its biggest-ever cross-border issue, and followed it later that month with a two-part deal for €2.4 billion ($2.78 billion).
Barbados priced the other sovereign issue of the day, selling $500 million worth of 10-year bonds to fund an ongoing tender offer, pricing the 2035 notes at par to yield 8% after opening the initial price talk in the mid-8% area, according to the source.
JPMorgan and Standard Chartered were joint bookrunners on the deal, the person said.
Investors holding roughly $378 million of the $453 million outstanding on the country’s 6.5% 2029 bonds tendered their notes as part of the buyback, the government said in a press release. It has yet to accept the notes tendered.
ROBUST DEMAND
JBS USA, for its part, returned to the US market for the second time this year to raise $3.5 billion in a three-part deal that was roughly 4.8 times oversubscribed, according to the source.
The Greely, Colorado-based company priced $1.25 billion in 5.5% long 10-year bonds at 99.429 to yield 5.572%, or 125 basis point over Treasuries, after opening the initial price talk in the 150 basis points area. It priced $1.25 billion in 6.25% long 30-year notes at 99.777 to yield 6.265%, or 140 basis points over USTs, after opening the deal at around 170 basis points, the source said.
It also priced $1 billion in 6.375% long 40-year bonds at 99.381 to yield 6.415%, or 155 basis points over USTs, after opening the deal in the 190 basis points area, the person added.
Demand for the notes peaked at $16.7 billion, according to the source.
BBVA, BB Securities, BMO, Bradesco, BTG Pactual, Citi, Mizuho and RBC Capital Markets were joint bookrunners on the offering.
JBS USA will use the proceeds to buy back any or all of the $1 billion outstanding on its 2.5% 2027 global bonds under a new tender offer, the company said in a press release. It will use the rest to redeem all or a portion of its 5.125% 2028 notes.
The company raised $1.75 billion in a two-part bond sale in January.