SHCP Performs First MX$41 Billion Refinancing Operation of 2023
Home > Finance & Fintech > Article

SHCP Performs First MX$41 Billion Refinancing Operation of 2023

Photo by:   Image by Geralt from Pixabay
Share it!
Emilio Aristegui By Emilio Aristegui | Junior Journalist and Industry Analyst - Thu, 01/12/2023 - 15:05

The Ministry of Finance and Public Credit (SHCP) exercised its first major operation of 2023 as part of the government’s active refinancing policy with a debt exchange in the local market. The operation reduces the pressures for maturities for 2023, with a refinancing operation that accounts for MX$41 billion (US$2.18 billion).

The Mexican government stated it aims to improve the country’s finances during President Andrés Manuel López Obrador’s administration, in what has been deemed a cautious approach that seeks to help future administrations arrive in better economic conditions. 

The SHCP specified that the transaction executed a cancellation of the Mexican debt through the repurchase of M Bonds and Udibonos via market interest rates. The ministry explained that the bonds had maturities between 2023 and 2038 worth MX$39 billion (US$2.07 billion). The operation performed a sale of M Bonds with maturities between 2026 and 2053 for MX$41 billion (US$2.18 billion) simultaneously. 

The Federal Government explained that after executing the first refinancing operation of 2023, Mexico’s due internal debt payments for 2023 were reduced by MX$34 billion (US$1.8 billion) from the beginning of 2022. 

The SHCP clarified that the objective of the operation relied on laying an adequate refinancing strategy to improve the Federal Government’s maturity profile and internal debt, while reducing liquidity pressures and implementing an appropriate strategy to aid the preservation of the market and its functioning. 

Mexico’s Congress outlined the requirements for SHCP to conduct the refinancing operations with a clear-cut debt ceiling that aimed to impede additional indebtedness. The SHCP explained that it carried out the operation in a strict manner to fully comply with the requirements and argued that the implementation was untroubled. 

The SHCP published the results of the cross swap of government values, stating that the first repurchased amount was scheduled for a Bond maturing in March 2023 worth MX$9.2 billion (US$488 million) that represented 24 percent of the entire distribution. The largest payment, worth MX$11.9 billion (US$634 million) and 30 percent of the total, was scheduled for December 2023. The rest of the payments were scheduled for 2024, 2029 and 2038, and the UDIBONO for 2023 and 2025. 

Photo by:   Image by Geralt from Pixabay

You May Like

Most popular

Newsletter