Mexicans want more Samurai bonds after state sales, Nomura says
By Bloomberg
Nomura Holdings Inc. expects Mexican issuers to follow the nation’s government by selling yen-denominated debt to Japanese investors.
Mexico sold 60 billion yen ($484 million) of Samurai bonds in July, including 20-year bonds, in its third consecutive year of tapping the market. The government has made multiple trips to Japan to meet life insurers, asset managers and banks to gain more investor understanding, said Arthur Rubin, head of Latin America debt capital markets at Nomura in New York.
“They wanted to establish a benchmark and a precedent so that other Mexican entities eventually would be able to follow,” Rubin said at LatinFinance’s Latin America Japan Investors Forum in Tokyo today. “We expect that to happen, actually relatively soon, for some high quality Mexican names.”
Mexico is the only Samurai seller from Latin America in the last three years, in a market that enjoyed record issuance of 2.68 trillion yen in 2014. The region’s issuers rarely consider Japan given investors’ cautiousness and sellers’ ability to tap U.S. and European markets easily at low costs, Luciano Siani, chief financial officer of Brazil’s Vale SA, the world’s largest iron-ore producer, said at the same event.
“For issuers in Latin America, Japan is currently almost out of the radar screen,” said Siani. With expectations that U.S. rates will rise, along with the appreciation in the U.S. dollar, Latin American issuers may look at Japan, he said.
“It’s in some way the responsibility of sovereigns and sovereign controlled entities, development banks, to really kick the door open in Japan,” said Nomura’s Rubin.