BBVA México acts as underwriter for Mexico’s first Resilience Bond

BBVA México congratulates Fideicomisos Instituidos en Relación con la Agricultura (FIRA) for the successful placement of bonds totaling MXN8.5 billion, through its Fondo Especial para Financiamientos Agropecuarios (FEFA). Demand for the offering totaled MXN9.70 billion, a bid-to-cover ratio of 1.14 times. The issues received a rating of mxAAA from Standard & Poors Global and AAA from HR Ratings México.

The deal was placed in two tranches, both at floating rates pegged to the TIIE funding rate:

1. FEFA 23: for MXN5.11 billion at a spread of 26 basis points over the TIIE Funding rate, at 1.5 years, in line with the Starting Price shared with the market.
2. FEFA 23V (Resilience Bond): MXN 2.89 billion at a spread of 30 basis points over the TIIE Funding rate, at 3.1 years, in line with the Starting Price shared with the market.

The deal was very well received, because the FEFA 23V is a milestone in the local debt market, the first Green Bond linked to the Climate Resilience of FEFA, and the first of its category I the Americas. The proceeds will be used for agribusiness investments to improve the system’s capacity through:

1) Absorption capacity: for example, modernization of equipment and machinery

2) Adaptation capacity: for example, change to drought-resistant seeds

FIRA’s bond is compliance with the Social Bond Principles of the International Capital Markets Association (ICMA) and has a second-party opinion from Sustainalytics.

With this transaction, FIRA ratifies the consolidation of its strategy and institutional actions in environment, social and governance matters. Furthermore, FIRA intends to continue developing the market for TIIE Funding rate-linked bonds, where it has found attractive prices that reflect its strong creditworthiness.

BBVA thanks FIRA for having selected us to underwrite this issue, and with this deal reiterates its commitment to assisting clients in projects that work for a more green, inclusive Mexico.