The Ministry of Finance affirmed that with the total repurchase of two bonds that it will carry out this year (for 3 billion dollars) it will decrease by 70 percent payments of amortizations of external debt of the Government scheduled for 2025, the first year of the next administration.
The agency announced that the early repurchase of a bond with an outstanding amount of 1.2 billion euros, a coupon rate of 1.375 percent and original maturity on January 15, 2025, will become effective on December 29.
Thanks to this operation, the amortization payments of the external debt scheduled for 2025 will rise to 1.28 billion dollars, compared to the 4 thousand 240 million dollars that were scheduled at the beginning of that year.
This operation is added to those executed by the Treasury, between July 2019 and August of this year in the international markets, which through the anticipated repurchase of a total of nine external bonds, an aggregate amount of approximately 14 thousand 160 million has been refinanced of dollars. This has been the largest refinancing carried out by an administration.
“The Government of Mexico acquired the commitment to release foreign debt payment pressures on the next administration”, he stressed.
How will the external debt be composed in 2023?
The General Economic Policy Criteria for 2023 established that for the following year, the external credit policy will aim to maintain the proper functioning of the liquid markets in which Mexico operates, including sustainable markets.
Refinancing strategies will be maintained to reduce short-term amortizations and liability management operations.
“At this point it is important to highlight that being 2023 the year with the smallest amount of bond redemptions denominated in foreign currency during the current administration (barely the equivalent of approximately 420 million dollars), external financing will continue to be a complementary source of resources for the Government”, they highlighted.
“Given the above, it is estimated that in 2023 the external market debt will be 100 percent at a fixed rate and 98.8 percent at a term of more than 1 year, maintaining an average life of 19.5 years,” they added.
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