Investors shun Mexican firms' corporate debt bonds as growth decelerates to slowest pace in 13 months
Bloomberg
Mexican corporate bonds are slumping the most in 13 months as slowing growth in Latin America's second-largest economy prompts investors to shun debt sold by companies from Cemex to Grupo Famsa.
Corporate dollar debt fell 1.26 percent in June, the biggest monthly loss since May 2010, according to JPMorgan Chase & Co. Bonds sold by Brazilian companies were little changed in June, while Russian corporate notes slid 0.59 percent.
Mexico's economy grew 2.4 percent in April, the slowest pace since December 2009, amid faltering export demand from the U.S., the Latin American nation's biggest trade partner.
Average corporate borrowing costs jumped 25 basis points, or 0.25 percentage point, in June to 6.40 percent, according to JPMorgan. Rising yields led Cemex, the largest cement maker in the Americas, to scrap a $650 million bond sale on June 23.
"Mexico continues to be directly affected by the U.S. economy, and you aren't seeing a solid recovery in the U.S. economy yet," Alvaro Gonzalez, an emerging-market credit analyst at Miller Tabak Roberts Securities Llc in New York, said in a telephone interview. "This is obviously impacting some industries in Mexico."
The average yield on Mexican government dollar bonds fell three basis points in June to 4.73 percent, according to JPMorgan.
