Mexican companies are setting records for local bond sales amid falling rates, approaching maturities, and growing institutional capital. Long-term placements by non-bank companies reached 234.8 billion pesos ($13 billion) over nine months, according to Banorte. This is 14% more than the entire last year and the highest since 2004 when the company began collecting data. The corporate bond market volume is now 1.4 trillion pesos.
"We notice a greater openness of investors to such placements," said Yasmin Matus, deputy director of debt markets at VALMEX Casa de Bolsa. According to her, the strong appetite allowed issuers to set narrower spreads than expected. The surge occurred after issuers stayed on the sidelines last year due to trade uncertainty and geopolitical conflicts. As maturities approach for major borrowers, including Pemex, and rates decline, companies are turning more to the domestic market. In the last month, large placements were made by CFE for 20 billion pesos and a division of Grupo Lala for 9 billion. These deals closed at 35 and 25 basis points below initial forecasts.
The market remains selective: the Mexican division of MercadoLibre did not reach its goal of 5 billion pesos, placing 3.75 billion. The company stated it was satisfied with the amount and rates, noting strong demand from pension funds, insurance companies, development banks, and private banks. According to Rene Robles from Moody's Local Mexico, this is a shift for markets that have not always been deep enough. "It used to be difficult to place 10 billion in Mexico," he said, but now it is not.
Banorte expects the pace to continue in October and November due to a large volume of maturities and a seasonal surge. Fibra Educa plans to renew June bonds, with major deals expected from FEFA and Toyota Financial Services Mexico.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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