Mexico accepts notes in tender offer for six euro-denominated notes

By Taylor Fox

New York, Jan. 15 – Mexico said it will accept, subject to proration and other terms, notes tendered in its offer to purchase for cash six series of its existing notes divided into two tranches up to a maximum purchase amount for each tranche, according to a news release.

The tranche A maximum purchase amount is €659,161,000, and the tranche B maximum purchase amount is €328,254,000.

As previously reported, the tender period began at 3:30 a.m. ET on Jan. 14 and expired at 7 a.m. ET on the same day for non-preferred tenders and at 9 a.m. ET on the same day for preferred tenders.

Tranche A notes

Mexico accepted for purchase the following tranche A notes:

• €111.16 million tendered and accepted preferred tenders and €123,978,000 tendered and accepted non-preferred tenders of the €1.6 billion outstanding 2¾% global notes due 2023 (ISIN: XS0916766057) at a price based on the 0% Bund due April 14, 2023 and a fixed spread of 25 basis points for a purchase price of €1,074.28;

• €53 million tendered and accepted preferred tenders and €22,539,000 tendered and accepted non-preferred tenders of the €1.25 billion outstanding 1 5/8% global notes due 2024 (ISIN: XS1198102052) at a price based on the 2024 interpolated mid-swap rate and a fixed spread of 45 bps for a purchase price of €1,052.86;

• €172,563,000 tendered and accepted preferred tenders and no tendered non-preferred tenders of the €1.5 billion outstanding 1 5/8% global notes due 2026 (ISIN: XS1974394675) at a price based on the 2026 interpolated mid-swap rate and a fixed spread of 100 bps for a purchase price of €1,055.20; and

• €135,531,000 tendered and accepted preferred tenders and €40.57 million tendered and accepted non-preferred tenders of the €1.5 billion outstanding 1¾% global notes due 2028 (ISIN: XS1751001139) at a price based on the 2028 interpolated mid-swap rate and a fixed spread of 120 bps for a purchase price of €1,064.29.

Tranche B notes

Mexico accepted for purchase the following tranche B notes:

• €59,595,000 tendered and accepted preferred tenders and €11.55 million tendered and accepted non-preferred tenders of the €1.5 billion outstanding 2 7/8% global notes due 2039 (ISIN: XS1974394758) at a price based on the 2039 interpolated mid-swap rate and a fixed spread of 215 bps for a purchase price of €1,105.88; and

• €257,109,000 tendered and accepted preferred tenders and no tendered non-preferred securities of the €1.25 billion outstanding 3% global notes due 2045 (ISIN: XS1198103456) at a price based on the 2045 interpolated mid-swap rate and a fixed spread of 225 bps for a purchase price of €1,129.65.

Offer details

Holders will also receive accrued interest up to but excluding the settlement date, which is slated for Jan. 20.

On Thursday Mexico also announced and priced new euro-denominated notes due 2033 and 2051.

The tender offer was conditioned on pricing of the new notes.

Mexico said it may, but is not required to, issue and sell new notes to holders who tender their old notes under the tender offer and place firm orders for new notes during the tender period.

If Mexico decides to issue and sell new notes to such holders, settlement for the new notes is expected to occur on Jan. 25. Any new notes issued to tendering holders in the tender offer will be consolidated and form a single series with, and be fully fungible with, the other new notes of the same series, to be issued and sold under the concurrent new notes offering.

With respect to the tranche A old notes, Mexico gave preference to tendering holders who also submitted an indication of interest for the purchase of new 2033 notes, and with respect to the tranche B old notes, Mexico gave preference to tendering holders who also submitted an indication of interest for the purchase of 2051 new notes.

Holders have no withdrawal rights with respect to any tenders of notes in the tender offer.

Mexico may subject each series of old notes to different amounts of proration in its discretion.

Following payment for old notes accepted under the tender offer, Mexico currently intends to redeem any and all 2023 notes that remain outstanding.

The dealer managers for the tender offer are Banco Santander, SA (+44 7418 709 688, +44 7742 403 679), Barclays Bank plc (+44 20 3134 8515, 888 603-5847), BNP Paribas (+33 1 55 77 78 94), Citigroup Global Markets Inc. (212 723-0859, 800 558-3745).

D.F. King & Co., Inc. (www.dfking.com/ums or ums@dfking.com) is the information agent.

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