Mexico hopes to be the first Latin American economy to tap Tokyo's bond market without a guarantee in a decade, but will likely face a tough sale to conservative Japanese funds. If Mexico is successful in placing the bond, it could be a sign that flagging growth and looming debt crises in the United States and Europe are further burnishing Latin America's image.
A decent sale by Mexico in the Samurai market could tempt other countries in the region, such as Colombia and Panama, to try to woo Japanese investors, analysts said. Samurai bonds are issued in Japan by a foreign borrower and denominated in yen.
In past decades, Latin American countries were synonymous with runaway deficits and default risks. But Mexico and peers such as Brazil, Chile, Colombia and Peru have turned their policies around and now boast far more prudent balance sheets than major developed economies.
"We think the current environment and the fact that Mexico has been able to position itself as an attractive investment ... suggest the transaction will be successful," Alejandro Diaz de Leon, head of the finance ministry's debt office, said in a telephone interview.
Diaz de Leon, who has headed the debt office since the start of the year, spoke with Reuters on a day of intense market volatility. Mexico has the most freely traded currency and bond market in Latin America and its fortunes are closely tied to the United States, which buys around 80 percent of Mexican exports.
Mexico's peso slumped again and local currency bonds sold off after a big rally on bets global interest rates will remain low for years to come.
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