The Ministry of Finance and Public Credit (SHCP) revealed that the financial cost of the debt decreased 10.7% annually in the period between January and November.
According to the SHCP, the amount of the cost of the debt was expected to reach 562,849 million pesos. However, in the fiscal year ending in November, a figure of 525.206 million pesos was observed, this was the result of the active refinancing strategy.
“The reduction in financial cost has to do with some refinancing operations carried out by the Treasury, taking advantage of the reduction in interest rates at a local and global level.” commented Janneth Quiroz, Monex’s deputy director of economic analysis.
The reduction in the financial cost contributed to the non-programmable expense being located below the schedule in 76,500 million pesos and in real annual 3.9% compared to the same period of 2020
Quiroz added that within the bond operations for the exchange of terms and rates are the one that was carried out on January 14 of this year in the euro market, in which the amortizations scheduled for 2023 were reduced by 1.8 billion euros. .
The second refinancing operation was carried out on April 6 in the dollar market, in which amortizations scheduled for 2023 were reduced by 2,225 million dollars after repurchasing bonds maturing in October 2023 and a coupon rate of 4.00 percent.
On November 17, it placed 15,000 million pesos in a new 3-year fixed rate bond. The issue will pay a coupon rate of 5% and will offer investors a yield of 7.18 percent.
Likewise, the current administration included a liability management exercise for a total amount of 700 million dollars.
Mexico became the second sovereign issuer in Latin America to place a bond in the dollar market for a 20-year term to pay a spread over the North American Treasury Bond in the same amount of time.
Reference-www.eleconomista.com.mx