The Treasury Secretary carried out the last refinancing of the year for 123 billion pesos.
With this operation, he said, the public debt portfolio denominated in pesos corresponding to 2025 and subsequent years is strengthened.
In addition, the average term of the refinanced debt is extended by 2.89 years. The new three-year M Bond reference, maturing in 2028, was placed at a yield rate of 9.68%.
Due to the high demand from investors, the liquidity of this instrument was increased by 33 billion pesos.
“In line with the public debt policy and the annual financing plan,123,437 million pesos were repurchased in various debt instruments,such as Cetes,Bondes F,Bonos M and Udibonos,” he stated.
He detailed that of this total, 36,531 million pesos corresponded to maturities in 2025; 57,501 million to 2026 and 29,405 million to maturities between 2031 and 2033.
“Simultaneously,longer-term instruments were placed,with maturities between 2026 and 2035. As for the new reference, the total demand exceeded 27 billion pesos, which is equivalent to 2.09 times the amount placed.”
He stressed that the new fixed-rate M Bond will pay a coupon of 8.50%.“With these operations, the Ministry of Finance concludes the strategy for managing liabilities and updating references for the fiscal year 2024, reaffirming its commitment to maintaining the debt on a lasting path, in strict accordance with the approved ceilings.”
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How does the new M Bond reference impact investor confidence in Mexico’s fiscal policies?
Interview: Treasury Secretary‘s Recent Debt Refinancing Strategy
Interviewer (time.news Editor): Thank you for joining us today. To start, could you explain the recent refinancing operation carried out by the Treasury Secretary for 123 billion pesos? What does this mean for Mexico’s public debt?
Expert: Thank you for having me.The recent refinancing operation is quite significant for Mexico’s public debt management. This operation strengthens the public debt portfolio denominated in pesos for the years 2025 and beyond. By refinancing, the government can better manage its liabilities and extend the average term of the refinanced debt by 2.89 years, which is crucial in a fluctuating economic habitat.
Interviewer: That sounds strategic.What were the key outcomes of this refinancing, particularly regarding the new M Bond reference?
Expert: The new three-year M Bond reference, which will mature in 2028, was issued at a yield rate of 9.68%. Given the high demand from investors, the liquidity of this instrument was increased by 33 billion pesos. This clearly indicates investor confidence in Mexico’s fiscal policies. Additionally,the M bond will offer a coupon of 8.50%, providing a stable income stream for investors.
Interviewer: You mentioned high demand from investors. How did this affect the debt instruments that were repurchased during the operation?
Expert: The repurchase included various debt instruments such as Cetes, Bondes F, Bonos M, and Udibonos, totaling 123,437 million pesos. Breaking it down: 36,531 million pesos corresponded to maturities in 2025; 57,501 million to 2026; and 29,405 million to future maturities between 2031 and 2033. This diversification in maturities helps in managing liquidity and risk effectively.
Interviewer: Interesting. the Treasury Secretary mentioned a commitment to maintaining debt on a lasting path. What implications does this have for fiscal policies moving forward?
Expert: This commitment is significant as it emphasizes sustainable debt management in line with approved ceilings, meaning that the government aims to keep debt levels within a manageable range. Moving forward, having a diversified maturity schedule and stable instruments can definitely help mitigate risks associated with sudden shifts in market conditions. It also instills confidence among investors, which is critical for future financing needs.
Interviewer: For our readers, what practical advice can you provide regarding investments in government debt instruments given these developments?
expert: Investors should consider diversifying their portfolios by including government debt instruments, particularly in times of economic uncertainty.The recent operation reflects a stable issuance environment that can provide reliable returns.Its also essential to assess the associated risks and match investment horizons with maturities. keeping an eye on yield rates and coupons can aid in making informed investment decisions.
Interviewer: Thank you for your insights. It’s clear that recent operations by the treasury have significant implications for both the public debt landscape and investment opportunities in mexico.
Expert: Absolutely, and thank you for the engaging discussion. It’s crucial for both policymakers and investors to stay aligned as this process unfolds.