Mexico’s Green Sovereign Bonds to Be Welcomed by Investors

(Bloomberg) -- Mexico’s debut in the green bond market may be well-received by investors hungry for environmentally and socially conscious debt.

After Chile sold long-dated dollar- and euro-denominated green bonds paying a record low yield last month, Mexico will hold investor meetings to debut its SDG Sovereign Bond Framework, which would be used to issue green euro-denominated debt.

With central banks around the world lowering interest rates, market appetite for higher-yielding Latin American sovereign bonds is high. Bonds that comply with environmental, social and corporate governance standards, ESG, could add an extra layer of attractiveness, according to Michael Roche, a strategist at Seaport Global Holdings in New York.

“Depending on the strength of its ESG score, there looks to be plenty of money chasing these securities,” said Roche, a strategist at Seaport Global Holdings in New York.

The Inter-American Development Bank said it expects Latin American borrowers to raise as much as $7 billion for environmentally-friendly projects in 2020.

Mexico hired BNP Paribas, Credit Agricole CIB and NATIXIS for the roadshow, which will begin on February 24.

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