Mexican Government Raises $7.5 Billion in International Bonds

The Mexican government has kicked off its financing program for 2024 by issuing $7.5 billion in long-term bonds in international markets. This early start is part of the government’s efforts to secure funding for its budget and support various initiatives.

Bond Details

The Finance Ministry announced that the bonds were issued as follows:

• $1 billion in five-year bonds with a yield of 5.07%
• $4 billion in 12-year bonds with a yield of 6.09%
• $2.5 billion in 30-year bonds with a yield of 6.45%

Compared to similar maturities at the beginning of 2023, the interest rates on the five-year and 12-year bonds are lower, while the rate on the 30-year bonds is slightly higher than that of an April 2023 issuance. The total demand for these bonds reached an impressive $21.3 billion.

Updated Fiscal Outlook

The Mexican government’s financing ceiling for 2024 has been raised in the federal budget approved by congress in November. As a result, the fiscal deficit is estimated to widen to 5.4% of gross domestic product, up from 3.9% in the previous year. Additionally, public debt-to-GDP is projected to increase from 46.5% to 48.8%.

Spending Priorities

With the upcoming election year, the government plans to allocate additional funds towards social spending and infrastructure projects. These efforts aim to complete ongoing initiatives and provide capital support for the heavily indebted state oil company, Petróleos Mexicanos.