Mexico joins 20 year club with new issue set to reach $3.26bn

Mexico, peso, 20 pesos, currency, FX, LatAm, notes, 575
By Oliver West
07 Apr 2021

Mexico on Tuesday became the second Latin America sovereign to use the 20 year US Treasury bond as a benchmark for a new issue, initially raising $2.5bn of 2041 notes to finance a tender offer. Later in the evening, the sovereign said it would likely increase the size of the 2041s to $3.26bn, with holders of old bonds set to switch into the new notes.

The US Treasury revived 20 year auctions in May 2020, and has continued to increase liquidity at that point on the curve. But in 2020 most 20 year supply in the US corporate bond market was still being priced off the more established 30 year Treasury.

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