Mexico sets cap, pricing in one-day cash tender for 10 series of notes

By Susanna Moon

Chicago, March 16 – The United Mexican States priced its one-day cash tender offer for several series of its outstanding notes held Thursday.

Mexico priced $3,148,339,000 principal amount of 4.15% global notes due 2027 on Friday, with proceeds of $748,339,000 to be used to fund the purchase of preferred tenders in the concurrent tender offer, according to an FWP filing with the Securities and Exchange Commission. The amount may be adjusted based on the final acceptance amount in the tender offer. Settlement has been set for March 28.

The maximum purchase amount was set at $1,207,570,000 principal amount, according to a separate update on Friday.

For the $1,643,518,000 5.95% global bonds due 2019, Mexico received preferred tenders for $104.53 million of the notes and non-preferred tenders for $88,738,000 of the notes. All of the tendered notes were accepted for purchase.

The purchase price for the 5.95% bonds due 2019 was set at $1,080.56 for each $1,000 principal amount.

Pricing for the other notes was set on Friday using a reference security plus a fixed spread.

For two series of notes, pricing was set using the 1.625% Treasury note due March 15, 2020 plus a spread to yield a Treasury rate of 1.625% for a purchase price per $1,000 principal amount as follows:

• $1,343,671,000 8 1/8% global bonds due 2019 priced using a spread of 0 basis points for a purchase price of $1,175.29; and

• $1,922,812,000 5 1/8% global bonds due 2020 priced based on a spread of 60 bps for a Treasury rate of 1.625% and purchase price of $1,078.57.

For the 8 1/8% notes, there was $585,881,000 of preferred tenders and $2.1 million of non-preferred tenders. None of these notes was accepted for purchase.

For the 5 1/8% notes, the issuer accepted for purchase all of the $26,574,000 preferred tenders and $27,208,000 of the $47,738,000 non-preferred tenders.

In the offers, proration of preferred and non-preferred tenders occurred only for the 5 1/8% global bonds due 2020, the company noted.

For four other note series, pricing was set using the 1.875% Treasury note due Feb. 28, 2022 plus a spread to yield a Treasury rate of 2.048% for a purchase price per $1,000 principal amount as follows:

• $1 billion of 3½% global bonds due 2021 priced based on a spread of 68 bps for a purchase price of $1,029.32;

• $2,559,254,000 of 3 5/8% global bonds due 2022 priced based on a spread of 119 bps for a purchase price of $1,017.65;

• $611,193,000 of 8% global bonds due 2022 priced based on a spread of 130 bps for a purchase price of $1,232.03; and

• $3,877,000,000 of 4% global bonds due 2023 priced based on a spread of 163 bps for a purchase price of $1,018.52.

For the 3½% notes, the amount of preferred tenders was $42.53 million and of non-preferred tenders was $24.68 million. None of these notes was accepted for purchase.

For the 3 5/8% notes, the issuer accepted all of the preferred tenders for $59,412,000 and the non-preferred tenders for $28,236,000.

For the 8% notes, the issuer accepted none of the $22,684,000 preferred tenders and $350,000 non-preferred tenders.

For the 4% notes, Mexico accepted all of the $206,248,000 preferred tenders and the $220,824,000 non-preferred tenders.

For the remaining three note series, pricing was set using the 2.25% Treasury note due Feb. 15, 2027 plus a spread to yield a Treasury rate of 2.54% for a purchase price per $1,000 principal amount as follows:

• $2,921,000,000 of 3.6% global bonds due 2025 priced based on a spread of 128 bps for a Treasury rate of and purchase price of $985.16;

• $2,796,000,000 of 4 1/8% global bonds due 2026 priced based on a spread of 138 bps for a Treasury rate of and purchase price of $1,015.13; and

• $320,945,000 of 11½% global bonds due 2026 priced based on a spread of 157 bps for a Treasury rate of and purchase price of $1,558.47.

For the 3.6% notes, Mexico accepted all $338.8 million preferred tenders and $107 million non-preferred tenders.

For the 4 1/8% notes, the issuer accepted none of the $307.6 million preferred tenders and the $74.4 million non-preferred tenders.

For the 11½% notes, the issuer took in none of the $770,000 preferred tenders.

The tender ended at noon ET on Thursday for non-preferred tenders and for 2019 5.95% notes preferred tenders and at 4 p.m. ET for preferred tenders other than 2019 5.95% notes.

Mexico previously said it may issue new notes to holders who tender their notes in the offer and place firm orders during the tender period. If Mexico decides to issue new notes, the sale would occur on March 23.

The tender offer dealer managers are Barclays (212 528-7581 or 800 438-3242), Deutsche Bank Securities Inc. (866 627-0391 or 212 250-2955) and J.P. Morgan Securities LLC (212 834-7279 or 866 846-2874). The billing and delivering bank is Deutsche Bank Securities Inc.

D.F. King & Co., Inc. (ums@dfking.com, 212 269-5550, 877 283-0317 or dfking.com/ums).

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