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IDB supports local currency corporate debt issuance in Mexico

The IDB approved its first partial credit guarantee of a public offering of corporate bonds of Leasing Operations de Mexico, S. de R.L. de C.V. (LOM)

The Inter-American Development Bank (IDB) has provided a partial credit guarantee for corporate debt issuance in local currency for 450 million pesos in Mexico under an IDB’s framework agreement with Ixe Casa de Bolsa.

The operation is in line with the IDB’s efforts to provide competitive responses to the financing needs of small and medium enterprises in Latin America.

“Our partial credit guarantee contributes to the ongoing process of developing opportunities in the Mexican capital market for medium-sized companies to diversify their sources of funding on reasonable terms,” said Daniela Carrera-Marquis, chief of the IDB’s Financial Markets Division.

The operation was under a framework program signed by IDB and Ixe Casa de Bolsa, a market leader in the management and placement of debt issuances in the Mexican financial market. The program’s primary objective is to support local corporations to issue debt instruments on more competitive conditions in order to attract institutional investors.

The issuance by Leasing Operaciones de México (LOM) reached 450 million pesos and, after IDB’s 50 percent guarantee, received a A and A+ rating from HR and Standard & Poor’s, respectively. The bond issuance was significantly oversubscribed, indicating a positive reception by investors.

IDB’s partial credit guarantee attracted additional funding from institutional investors in excess of the guarantee amount, benefiting LOM by providing access to new source of funds.

“IDB guarantee has a twofold benefit as it not only improved market conditions for LOM’s debt issuance but also helped support high environmental impact leasing operations,” said IDB project team leader Diego Flaiban.

LOM also operates as Water Capital and was established in 1998 as a company specialized on financing sustainable technologies in the industry, commerce and construction sectors. Water Capital is largely dedicated to provide operational lease of machinery and equipments that have a minimum ecological footprint.

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