Mexican investors showed strong favor for fixed-rate debt this week, piling into a tap of the Fondo Especial para Financiamientos Agropecuarios’s fixed-rate bond on Wednesday.
The deal was heavily subscribed, demonstrating that bond issues can go through in spite of a tricky local market.
Fefa, a government-owned agricultural lender, sold a 10-year fixed rate bond on Wednesday. The deal drew some 8 billion pesos ($482m) of demand, perhaps at the expense of the floating rate bond that the borrower also sold the same day. That 2020 instrument drew less than 2 billion pesos of demand.
Fefa’s bond sale came as Mexico’s local market otherwise moves slowly.
Concern over a rise in US interest rates and low commodity prices have made conditions in the Mexican bond “bumpy”, said a Mexico City-based DCM source recently, adding that activity is expected to be low in the peso bond market for the rest of the year.
Desarrollos Eolicos Mexicanos and Arco Norte are two borrowers that have delayed planned debt issuances amid rocky conditions in the local market, LatinFinance has heard. LF