Mexico Selling 100 Year Sovereign Bonds, US Consols To Follow
If anyone needs any confirmation that investors are now fully aware repayments at maturity of sovereign debt issues will likely not occur, ever, is today's announcement that Mexico is in the market with a $500 million century issue (100 year maturity). Lead underwriters on this brilliant piece of paper are Deutsche Bank and Goldman. We are willing to wager that it will also be these two firms' restructuring groups which will handle the ensuing insolvency of the southern neighbor. Which, however, will not occur before the US brings back that other brilliant invention- the consol (which was so brilliant, one wonders if Goldman did not exist back in the 18th century).
Mexico plans to sell $500 million of bonds due in 100 years in the country’s longest-maturity debt issue.
The government will sell the bonds as soon as today, said a person familiar with the transaction. Deutsche Bank AG and Goldman Sachs Group Inc. are arranging the sale, said the person, who declined to be identified because terms aren’t set.
Mexico sold 850 million euros ($1.08 billion) of seven-year bonds July 8 in its first European offering since 2005. It has raised $4.1 billion in international markets this year, according to data compiled by Bloomberg. Mexico’s 6.05 percent bond due in 2040 is currently the country’s longest-maturity security, Bloomberg data show.
The extra yield investors demand to own Mexican debt instead of U.S. Treasuries narrowed one basis point, or 0.01 percentage point, to 1.51 percentage points at 12:08 p.m. in New York, according to JPMorgan Chase & Co.’s EMBI index.