The DGAERI (acronym in Spanish for: Deputy General Director’s Office for Issuances and International Relations) manages and carries out the issuances of debt instruments for the bank, in the domestic as well as international capital markets, with the purpose of meeting the institution’s funding needs in the medium- and long-term. Likewise, it performs ongoing follow-up on the different indicators of the capital markets and on the secondary market of Bancomext debt issues. In the local market, Bancomext issues Development Bank Certificates.
Debt issues
By the end of 2021, there were fifteen valid issuances of Cebures (Certificates) for a total of 45,880 million MXN, including the six issuances carried out in May and October 2021 for a total of 20,000 million MXN, whose terms and conditions were the following:
As to the issuances of local debt in 2021, the DGAERI carried out in May of this year three issuances of certificates for a total of 10,000 million MXN; two issuances at a variable rate with maturities of 2.8 and 5 years, and another one at a fixed rate with a 10-year maturity.
In addition, in October of the same year three issuances of certificates were carried out for a total of 10,000 million MXN, with maturities of three and five years at a variable rate, and another one with a 10-year maturity at a fixed rate. The issuances at a variable rate obtained the all-time lowest spreads on 28-day TIIE (acronym in Spanish for Interbank Offering Rate) for the bank. These were the bank’s first issuances in Mexican pesos (MXN) with the label of sustainability, within the frame of reference that had previously been developed to that effect.
In some cases, the resources in MXN that come from these issuances are exchanged for USD through Swap operations, to complement the funding in USD, which results in very competitive funding costs in USD.
As to the international market, Bancomext has a valid Senior bond for $1 billion USD with maturity in October of 2025.
The bank also has access to other markets such as the Swiss, the Japanese and the Australian market, among others, according to proposals from international banks.
Bancomext issued the first and only subordinated bond as a Mexican development bank in August 2016, which allowed to significantly strengthen the bank’s capitalization index. The issuance was for a total of $700 million USD, which had a prepayment option by the issuer at the 5th year of the term.
Said prepayment option was used on August 11th, 2021, as the market was expecting, with the full payment of the $700 million USD. Simultaneously, and with the purpose of not losing the benefits in the capitalization index, the bank carried out a new issuance of subordinated bonds, which it administered during the first two quarters of the year, with the coordination and under the leadership of the DGAERI. The new subordinated bond was issued under the following terms:
| Amount: | $500 million USD |
| Date of issuance: | August 11th, 2021 |
| Date of maturity: | August 11th, 2031 |
| Term: | 10 years |
| Prepayment Option: | As of the 5th year of the term |
| Format: | 144A / Reg S |
| Rating: | BB/Baa3 (Fitch/Moody’s) |
| Coupon: | 2.72% |
| Price: | 100% |
This issuance was carried out within the frame of reference for sustainability bonds developed by the bank in parallel to managing the operation. This makes it the first subordinated bond with a sustainable label in Latin America, with the lowest coupon in the region’s history.
International Financial Bodies
Bancomext carries out the negotiation and contracting of medium- and long-term credit lines, bilateral and multilateral, with the Export Credit Agencies (ECAs) and other International Financial Bodies (OFIs for its acronym in Spanish), as well as the funding with international commercial banks and Debt Issues in the Domestic and International Markets, in accordance with the institutional funding strategy.
These lines support investment projects and sectorial support programs, such as programs for hotel services, automotive, transportation, industrial plants and facilities, renewable energies, sustainability and environmental programs. The premise of Bancomext has been to provide to the business sector convenient financial conditions for its projects and position its business venture in the international markets.
The balances, by the end of December 2021 amount to $302.7 million USD for multilateral bodies, and to $696.9 million USD for bilateral bodies.
The last lines with these characteristics that Bancomext subscribed were in 2020, whose details are as follows:
The Institution continues to arrange the signing of agreements through “Collaboration Agreements” with banking institutions and with foreign government agencies, with the purpose of repositioning Bancomext in the international markets, with the assumption of promoting the flow of foreign investments to Mexico, financing and/or guaranteeing projects of interest for all stakeholders and extend the international markets for Mexican export products.
Representative Office in Beijing, P.R.C.
The representative office of Bancomext in Beijing coordinated the virtual participation of the Mexican Embassy in China in some trade forums. In these, the Institution presented the business situation in our country and promoted the export of Mexican products as well as the attraction of Chinese investors to Mexico.
Likewise, the Institution participated in the Eighth Meeting of the High-Level Group (GAN for its acronym in Spanish) between Chinese and Mexican authorities, with a presentation in the panel on investment opportunities.
On the other hand, remote meetings are being coordinated between Chinese companies and their Mexican counterparties interested in entering that market or in participating in co-investment projects.
Other Relevant Results
In October of 2020, the Institution signed and expended a loan with Banco Santander; what stands out in this operation is the fact that it had the guarantee of the Multilateral Investment Guarantee Agency (MIGA), an agency from the World Bank. The loan was for an amount of $600 million USD with an 8-year maturity, with a 4-year grace period for interest payment. Having said guarantee allowed to obtain a favorable cost, given that the creditors are protected by an Aaa risk, which is the World Bank’s credit rating.
This is the first loan in Mexico that is carried out with the MIGA guarantee. Its goal is to finance working capital for sectors affected by the COVID-19 pandemic.
The plan is to sign in 2022 the addenda to the Collaboration Agreement between Bancomext and the Ministry of Foreign Relations (SRE for its acronym in Spanish), and based on this:
- The Interinstitutional Committee for Planning and Monitoring was established, with the participation of SRE, the Office of the President, the Ministry of Economy (SE for its acronym in Spanish) and Bancomext. Throughout the first half-year of 2020, four follow-up meetings or videoconferences were carried out.
- The Institution is analyzing the support to SRE to promote trade and foreign direct investment by assigning Bancomext officials to the Mexican Embassies and Consulates overseas, or by channeling to the bank the opportunities reported in the diplomatic representations abroad, for due assistance and follow-up.
To date, the negotiation of the text for the Memorandum of Understanding (MoU) with the Export-Import Banks of Hungary and Russia has concluded.