Banorte Taps US$1.3 Billion Tier 1 Debt to Meet Basel III Needs

Grupo Financiero Banorte has issued US$1.35 billion in perpetual capital notes in international markets to strengthen its capital position under Basel III regulatory standards. The Mexican financial institution reported to the Mexican Stock Exchange that the issuance was structured in two series of Additional Tier 1 instruments designed to reinforce regulatory capital and absorb losses during periods of financial stress, without diluting existing shareholders.

The first tranche comprises US$600 million in perpetual capital notes with a 6.5-year call option (NC6.5), carrying a fixed coupon of 8.00%. The second tranche totals US$750 million in perpetual notes with a 10-year call option (NC10), carrying a fixed coupon of 8.450%.

International credit rating agencies assigned sub-investment-grade ratings to the issuance. Moody’s Investors Service rated the securities Ba3, while S&P Global Ratings assigned BB-. These classifications reflect the high loss-absorption characteristics required of subordinated instruments before standard senior creditor protections apply.

The international placement follows a broader sector review by S&P Global Ratings, which assessed 14 Mexican financial institutions. The agency affirmed Banorte’s long-term national scale rating at AAA and its short-term rating at A-1, with a stable outlook. In a statement dated June 1, S&P said the review did not identify meaningful deviations from prior expectations or material changes in credit profiles that would warrant upward or downward pressure.

Banorte 1Q26 Profit Rises to MX$15.5 Billion

The capital issuance coincides with a modest first quarter of 2026 for Banorte, which reported net profit of MX$15.5 billion (US$891.3 million), a 1% year-over-year increase from 1Q25. The result suggests stabilization in the bank’s financial performance following a period of restructuring and impairment losses recorded in late 2025.

According to its financial report, performance was supported by a 6% annual increase in the total credit portfolio, which reached MX$1.2 trillion (US$69 billion). Management attributed the growth to stronger loan origination and credit deployment despite a challenging domestic macroeconomic environment.

The consumer credit segment was the main driver, rising 11% year over year to MX$542.2 billion (US$31.2 billion). Within this category, automotive lending showed the strongest momentum, increasing 30% compared with 1Q25 to MX$73.8 billion (US$4.2 billion).

“We are growing more than the market because Mexico continues to rapidly adopt banking tools, and consumer credit is expanding positively,” said Marcos Ramírez Miguel, CEO, Banorte. “We feel confident and believe the trend will continue in this direction.” Ramírez Miguel added that credit demand is expected to remain strong through the year, citing the 2026 FIFA World Cup as a potential catalyst that could provide an additional boost to Mexico’s GDP.