LatinNews Daily - 16 November 2020

* Mexico’s finance ministry (SHCP) has announced that it has carried out a government securities swap worth M$44.1bn (US$2.2bn) to boost the federal government’s cash flow. The operation involved the repurchase of bonds maturing in June and December 2021, and June 2022, offering rates of 4.29%, 4.30%, and 4.40% respectively, in exchange for new bonds maturing in 2023 and 2047. The SHCP also announced an additional auction of government bonds for M$42.3bn for which total demand was M$44.6bn. The SHCP reiterated its promise to use public debt in a “responsible way, in congruence with the objectives necessary to rely on healthy public finances”. The moves come as international credit ratings agency Fitch Ratings recently reaffirmed Mexico’s 'BBB-' rating, noting that Mexico’s fiscal policy response to the coronavirus (Covid-19) pandemic “has been one of the smallest among rated sovereigns, at around 0.7% of GDP above-the-line”. Fitch expects Mexico’s general government debt to rise by seven percentage points to 50% of GDP in 2020.

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