Mexico

Even the strongest companies are not safe. When Mexican state oil company Pemex — alongside the Mexican sovereign — was awarded an A3 rating in 2014 the talk in the market was of the country’s energy reform helping it to bridge the gap between emerging and developed markets.

Mexican building materials company Cemex, has signed $3.79bn of loans including a €620m tranche after an upgrade to BB- from Fitch.

With emerging market currencies taking a battering across the globe, local currency bond issues continue to be a tough ask. However, innovations in the Mexican market are providing an encouraging grounding for future deals.

Opsimex, the telecoms tower spin-off of Mexican giant América Móvil, could issue in dollars as soon as Thursday if market conditions are good enough after completing a Ps15bn ($920m) local market bond sale on Wednesday.

While some of the shine has come off its reform programme, Mexico occupies a key position in the emerging market universe, with its highly respected central bank, finance ministry team and policy agenda lauded by the international investor community. Philip Moore reports on the country’s progress since President Peňa Nieto came to power in 2012 and the long term impact of the far-reaching and ambitious reform programme.

In local and international bond markets the Mexican government has led the way in recent years, demonstrating the importance of a proactive and innovative debt management strategy. This has allowed the country to calmly navigate periods of volatility in emerging markets. With such volatility likely to persist until after the Federal Reserve finally raises interest rates, GlobalCapital sat down with the country’s debt chief and leading bankers and local investors in Mexico City to find out what Mexico does and needs to do to achieve such stability.

Finance Minister Luis Videgaray’s decision to cut annual infrastructure spending by $1.15bn in his January 2015 budget was unfortunate considering how much needs to be spent on the country’s inadequate roads, railways, ports and power facilities. Philip Moore reports on whether the private sector can help fill the infrastructure finance gap.

Mexico’s private pension funds (Afores) have played a key role in supporting the growth of the domestic capital market since the late 1990s. Now it’s time for them to diversify, writes Philip Moore.

Mexico could hardly enjoy a better reputation among emerging market investors right now, with companies in the country revelling in their new role as darlings of the capital markets. GlobalCapital met leading borrowers and banks in Mexico City to discuss how far-reaching the effects of the energy reforms will be, and the prospects for peso-denominated funding amid the government’s attempts to entice international buyers into the domestic corporate debt market.

Mexico is seen as a bright spot in the emerging markets, and investors are hungry for assets. But while disintermediation has provided plenty of fodder in corporate funding markets, the banking sector has yielded far less issuance. Could an increase in lending tip the scales? Will Caiger-Smith reports.

Larger companies needing growth capital have a useful source in Mexico’s stockmarket, where demand in roughly equal quantities from domestic and foreign investors has supported a strong rise in issuance. It is going through a dip this year – but as Jon Hay reports, if Mexico delivers on reforming energy markets, there will be plenty of deals to come.