Mexico’s peso bonds surged after Standard & Poor’s raised the nation’s credit rating one level, restoring it to its 2009 status.
Yields on benchmark peso bonds due in 2024 fell nine basis points, or 0.09 percentage point, to 6.29 percent at 10:32 a.m. in Mexico City, the biggest drop on a closing basis since Dec. 6, according to data compiled by Bloomberg. The price rose 0.80 centavo to 129.34 centavos per peso. The peso climbed 0.1 percent to 12.9566 per dollar and is down 0.6 percent this week.
S&P raised Mexico to BBB+ from BBB with a stable outlook yesterday as analysts cited a change to the constitution opening the energy industry to private investment. Congress approved the oil sector measure this month, and President Enrique Pena Nieto is expected to sign it into law today.
“While I was not expecting the move yesterday, it was in the cards after the reforms were delivered,” Alejandro Urbina, who helps manage $800 million at Silva Capital Management LLC, said in an e-mailed response to questions. “Pena Nieto overachieved on this. Very positive stuff.”
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