Mexico Raises $1.8 Billion in First Samurai Bond Sale Since 2020

Mexico has successfully issued its first Samurai bond in two years, raising USD1.8 billion from investors in Japan. The sovereign sold four different tranches with varying maturities: 3.5 years, five years, 10 years, and 20 years. These bonds were structured as Sustainable Development Goals (SDGs) bonds, which will support the country's general budgetary spending and social and development expenditures under its 2026 federal budget.

The sale was notable for exceeding expectations despite some investors being wary of Mexico's lower-end investment-grade ratings. Demand for the bonds was concentrated in the shorter maturities, with the 3.5-year tranche pricing at Tonar mid-swaps plus 115 basis points and the five-year tranche pricing at plus 140 basis points.

A banker involved in the deal told IFR that Mexico paid a premium to its secondary US dollar curve, with prices ranging from 30 basis points on the 3.5-year tranche to nearly 20 basis points on the 20-year tranche.