New Issue: Mexico sells warrants to exchange $1.25 billion of debt for new local currency notes

By Aaron Hochman-Zimmerman

New York, March 28 - The United Mexican States announced the sale of warrants covering a total of $1.25 billion of debt securities.

Mexico auctioned 1 million series XWA08 debt exchange warrants and 250,000 series XWB08 debt exchange warrants that will allow holders to trade 21 series of old bonds for five newer local currency exchange securities, according to a market source.

The warrants will be exercisable for the exchange securities on Oct. 9. The government may elect to postpone the exercise date until Oct. 24.

If the MBonos securities, which have different minimum values assigned, are below their limit on the exchange date, the warrants will be voided.

The Udibonos securities will be exercised at the applicable dollar-peso or euro-peso exchange rate on Oct. 7.

Barclays and Merrill Lynch were asked to act as bookrunners for the Rule 144A and Regulation S deal.

Series XWA08 exercised for: 9½% MBonos due 2014 if trading above 97.6

7¾% MBonos due 2017 if trading above 97.75

10% MBonos due 2036 if trading above 93

Series XWB08 exercised for: 3½% Udibonos due 2017, at applicable dollar-peso or euro-peso exchange rate

4½% Udibonos due 2035, at applicable dollar-peso or euro-peso exchange rate

Warrants yield exchange securities when combined with the following old bonds:

• 10 3/8% global bonds due 2009

• 8¼% bonds of 1997/2009, originally issued in Deutschemarks

• 9 7/8% notes due 2010

• 7½% euro-denominated notes due 2010

• 8 3/8% global notes due 2011

• 7½% global notes due January 14, 2012

• 6 3/8% global notes due 2013

• 5 3/8% euro-denominated global notes due 2013

• 10% step-down notes due 2013, originally issued in Italian lira

• 5 7/8% global notes due 2014

• 6 5/8% global notes due 2015

• 4¼% euro-denominated global notes due 2015

• 11 3/8% global bonds due Sept. 15, 2016

• 11% notes due 2017, originally issued in Italian lira

• 8 1/8% global bonds due Dec. 30, 2019

• 5½% euro-denominated global notes due 2020

• 8% global notes due 2022

• 11½% global bonds due 2026

• 8.3% global notes due 2031

• 7½% global notes due 2033

• 6¾% global notes due 2034

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