Last week,Mexico sold One Billion Dollars worth of 100 year bonds. This is the
first of this type of sale by a Latin American government and fueled demand for
higher yield,emerging market assets. Emerging market debt has become favorable
with investors who seek the safety of bonds but look for greater returns. The
demand was 2.5 times the amount placed.
worked to arrange the sale. Richard McNeil,head of Latin American capital
markets at Goldman,said more century bonds from Latin America were “quite
possible. The appetite among investors for investments in Latin America is very
The ability to offer this sends a very positive signal that
investors believe in the long term repayment capability of the country and
confidence in the future of Mexico. The country has been able to reassert and
consolidate its positive reputation with investors and investing in
This bond is likely to become a benchmark for Mexico
and is expected to yield between 6.0 and 6.125%.
“The 100-year bond
offering is placing more confidence in the nation,” said Omar Martin del
Campo, a trader at Banco Ve Por Mas SA in Mexico City. “The bonds are helping
contribute to a better long-term outlook.”
The peso continues to rise,
showing a 5.1% gain against the dollar this year. Mexico's stock market hit an
all-time high,beating Brazil and the US for the first time since 2002.