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América Móvil has set a new mark for Mexican corporate borrowers, issuing $734m in peso-denominated bonds maturing in 30 years.
The issue marks the largest local currency issue of long maturity, amounting to about four times the outstanding face value of the government’s benchmark 30-year bond issue.
The deal, albeit from an unusually strong borrower, could open the door for other companies of similar credit quality to issue long-term local currency debt, said a source knowledgeable about Mexican markets.
América Móvil, controlled by billionaire Carlos Slim Helú, is Latin America’s biggest mobile phone group, with more than 100m subscribers and operations in 14 countries. Its market capitalisation is $80bn.
The company sold 8bn pesos of bonds, paying 8.46 per cent, or about 80 basis points more than the yield on Mexican government paper.
Investors in Mexico, the US and to a lesser extent in Europe bought the bonds, in a sale limited to institutional investors.
This year, América Móvil and Mr Slim’s Teléfonos de México, the country’s biggest fixed-line carrier, spent $3.7bn to buy the Latin American operations of Verizon Communications, the US telecoms group.
The acquisition extended Mr Slim’s dominance over the region’s telecoms market. Aside from América Móvil’s position, Telmex has operations in Chile, Colombia, Argentina, Uruguay and Peru. In 2004, it bought Embratel, Brazil’s largest telecoms company.
Mr Slim, 66, was this year ranked the world’s third richest man by Forbes magazine with an estimated net worth of $30bn – exceeded only by Bill Gates and Warren Buffett.