CFE Issues Sustainable Bonds Worth US$1.5 Billion

CFE has issued US$1.5 billion in sustainable bonds on international financial markets. This marks CFE's second issuance of sustainable bonds, following a previous issuance of MX$10 billion (US$585 million) in July 2023.

CFE announced that the funds raised on Sept. 17 will be used to refinance short-term bank debt and support initiatives that accelerate the company's energy transition and social inclusion efforts.

The bond issuance is divided into two tranches: US$500 million with a 5.3-year term maturing in January 2030 at an interest rate of 5.70%, and US$1 billion with a 10-year term maturing in January 2035 at a coupon rate of 6.45%. According to CFE, the issuance achieved a reduction of 40 and 45 basis points, respectively, compared to initial offers.

Over 260 institutional investors participated, including investment funds, insurance companies, pension funds, brokerage houses, and private and commercial banks from the United States, the European Union, Latin America, and Asia. The total demand was 6.5 times the amount issued.

The bonds were structured with a favorable opinion from Morningstar Sustainalytics. The proceeds will finance renewable energy and energy efficiency projects, social services, greenhouse gas emission reductions, and social inclusion initiatives, aligning with the goals of CFE's 2024-2028 Business Plan.

The bond issues received ratings of BBB from S&P Global Ratings, Baa2 from Moody’s, and BBB from Fitch Ratings. The global coordinators of the transaction were Bank of America, HSBC, Citi, Mizuho, and BBVA, while BNP Paribas, Santander, Scotiabank, and SMBC served as placing banks. Scotiabank acted as the structuring agent for the sustainable bonds.

This move aims to strengthen CFE’s financial position and commitment to sustainable energy, reflecting broader efforts to enhance Mexico's energy infrastructure and environmental sustainability.