Mexico

Mexico’s Pemex put smiles on the faces of bankers and investors with a $5.5bn triple tranche bond issue on Tuesday, the first Latin American bond to be sold in the US since before the US election.

Latin American bond bankers believe that Tuesday’s triple tranche bond issue from Pemex is likely to have been the last cross-border deal of the year from the region, even though the bonds provided further encouraging signs with a strong aftermarket performance.

Mexican state-owned oil giant Pemex responded to Mexico’s impressive first competitive deep-water oil auction by reminding investors of its prowess in markets with a $5.5bn triple tranche bond.

Latin American issuers again showed no interest in cross-border new issue markets this week as Mexican retailer and financial services company Grupo Elektra said it would use domestic bonds to prepay dollar bonds.

Senior Latin America DCM officials at some market-leading bookrunners said this week that they feared there would be no more dollar issuance from the region in 2016, although a couple of dissenting voices thought one or two issuers may “panic” and attempt to issue.

After a slight recovery in Latin American credit markets on Wednesday, Latin American bond bankers said the region’s borrowers should be ready and waiting to issue as soon as a window becomes available.

Just one-fifth of Mexican corporate bond issuers are likely to escape unscathed from US president-elect Donald Trump's proposed trade protectionism policies, said Fitch on Monday.

The benign reaction across capital markets to Donald Trump's surprise US presidential election victory did not spread as far as Latin America. A brutal sell-off on Thursday further complicated an already tough picture for Mexican issuers facing uncertain times as participants wonder just how badly a Trump presidency could affect the country, writes Oliver West.

A shift of momentum in the US presidential race has sent tremors through derivatives markets this week, with equity implied volatility ramping up, credit index spreads widening and the Mexican peso slumping against the dollar.

Mexico raised completed the financing of all its external debt obligations for 2017 on Tuesday, selling €1.9bn of long eight and 15 year bonds in its second euro-denominated bond of 2016.

Mexico has followed Argentina to the euro market and has opened books on a deal that will see it print fresh eight year debt and an increase of its existing 31s.

CFE provided a strong base for fellow Mexican quasi-sovereign Nacional Financiera to issue as soon as next week after selling a long 10 year bond on Tuesday that tightened 10bp-12bp in the two days after pricing.