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By Michael Turner
LONDON, April 8 (IFR) - The United Mexican States has begun marketing the first ever euro-denominated Century bond from an emerging markets issuer as borrowers continue to take advantage of attractive pricing conditions in the single currency.
The Latin American sovereign, which is rated A3 by Moody’s and BBB+ by both Standard & Poor’s and Fitch, has announced an initial yield of 4.50% area for a bond that will mature in March 2115, according to a lead manager.
At that level, the new bond’s proposed yield is already far below where Mexico’s Century bonds denominated in US dollars and sterling are trading.
Issuers in the single currency have seen bond yields plummet as the European Central Bank began its 1.1trn bond-buying programme in March.
Mexico has an outstanding US$2.68bn October 2110 bond that on Wednesday morning was trading at a yield of 5.22%,according to Thomson Reuters. Its £1bn March 2114 note was at 5.24%.
Goldman Sachs and HSBC are bookrunners on the new SEC-registered trade, which is expected to be Wednesday’s business.
This is Mexico’s second visit to the euro market this year. In February it sold a 1.25bn March 2024 bond at a yield of 1.687% and a 1.25bn March 2045 note at a yield of 3.093%. (Reporting By Michael Turner; Editing by Alex Chambers)