Mexican state trust FONDO placed long-term debt securities worth 4.5 billion pesos on the Mexican Stock Exchange. The funds are planned to be directed toward strengthening financing for agricultural and rural projects, The Rio Times reports.
FONDO — the Guarantee and Development Fund for Agriculture, Livestock and Poultry Farming — is a Mexican federal state trust. It is part of FIRA, a system of four federal trusts whose trustee is the country’s central bank, the Bank of Mexico. FIRA provides financing and guarantees through commercial banks.
Three series of securities
The placement took place through three series of debt securities issued by the trust. The FONDO 26 series amounted to 1.3375 billion pesos, FONDO 26-2 to 2.23425 billion pesos, and FONDO 26S to 928.25 million pesos. Together, they total 4.5 billion pesos.
More current news is available on the UA.News Telegram channel Telegram.
The maturity of FONDO 26 is approximately one and a half years, FONDO 26S about 4.5 years, and FONDO 26-2 approximately 5.5 years. FONDO 26 has a floating interest rate, while FONDO 26S and FONDO 26-2 have fixed rates. The source does not provide specific coupon amounts or benchmark rates.
Social bond and rating
The FONDO 26S series is designated as a social bond; it is the only series of this type within the placement. The source notes that it did not find an issuance framework or an independent external review for this social bond.
Fitch assigned all three series an AAA(mex) rating, the highest on the agency’s Mexican national scale. This placement is described as FONDO’s first long-term entry into the domestic capital market. FONDO is the first and oldest trust in the FIRA system, established in 1954.
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