Foreign Issuance into the local debt capital markets i.e. Mexico: An interesting alternative to other traditional markets.
By Francisco Romano Smith, Director, Actinver
Benefits
- Drivers: Arbitrage between issuing direct hard currency vs Local Currency and swapping into hard currency
- Size: Benchmark transactions are smaller in size US$100-300MM, issuers who need funding below US$500MM could find it interesting to explore local markets
- New Investor base: Issuers can tap local institutional investors that are restricted to invest cross-border and access to international markets could offer attractive funding
- Lower Issuance costs: Legal costs, underwriting and placement fees are lower in local markets.
- Reporting and Disclosure: Same reporting requirements as market of origin
- Local Investment Grade = AAA: Countries in LATAM and Caribbean region find BBB issuers very attractive they are rated AAA locally and find interesting demand.
It is worth exploring some local markets in the Region.