Mexico Refinancing Debt To Help Next Government, Official Says

Mexico's finance ministry has been tasked with refinancing the country's debt, especially bonds maturing in 2025, in order to help ease the financial burden on the next administration when it takes office, a senior official said.

Some 40% of the 2025 debt profile has already been refinanced and that number could increase to 70% or 80%, Deputy Finance Minister Gabriel Yorio told Reuters in an interview at his offices late on Wednesday.

President Andres Manuel Lopez Obrador had asked the ministry to refinance as much debt as possible, as well as to lower costs and extend maturities, Yorio said.

"He gave us very clear instructions to reduce 2025 maturities in order to make the financial transition as smooth as possible," he added.

Mexicans will elect their next president in June 2024 and Lopez Obrador, who took office in 2018, by law cannot run for a second term. His ruling National Regeneration Movement (MORENA) remains far more popular than the main opposition parties.

Mexico City Mayor Claudia Sheinbaum and Foreign Minister Marcelo Ebrard are among those jostling for the MORENA candidacy.

Since coming to power, Lopez Obrador's government has already refinanced the equivalent of $63 billion in debt - much of that denominated in pesos in the local bond market - equivalent to some 11% of Mexico's total debt, said Yorio.

The government would look for new opportunities to refinance or buy back external and domestic debt, he added.

Yorio's team is also working to develop a local debt market built on sustainable bonds.

"What we're looking to do is create all the yield curves so private companies can use them to price their own instruments when they want to launch some type of (green) bond or raise capital for a sustainable program," he said.