We are introducing a new document focused on key statistics observed in the corporate credit market in Mexico and LatAm. We highlight our views on the bonds we previously recommended and provide an update on the performance of LatAm non-financial corporate (NFC) spreads we have been monitoring over the past month. Based on this analysis, some of the key points are as follows:
- We see a downward trend in spread levels in Mexico, somewhat explained by Pemex bonds’ spread tightening over the last three months. We expect investors to take in some duration bonds as central banks move to lower their benchmark interest rates.
- Yields are still attractive despite the narrowing of spreads.
- In our MXN credit strategy, we remain positioned in investment-grade (IG) issuers with low default risk, specifically those locally rated at AAA – AA. We prefer fixed-rate bonds with high coupons or those priced significantly below face value to benefit from the rate cuts.
- Investors remain cautiously optimistic about LatAm credit rated from BBB to BB.
- The trend is for a narrowing in spreads: Overall, there is a narrowing trend in spreads across most sectors and maturity ranges.