The telco generates a significant portion of its revenues in its home country and until recently had to turn to US or European debt markets to meet its financing needs as the domestic capital reserve was not deep enough.
América Móvil plans to issue more peso-denominated debt, prioritizing the Mexican market, as the telecom company seeks to align its financing structure with its revenue, Chief Financial Officer Carlos García Moreno said.
Mexico City-based América Móvil, which offers broadband, wireless and other services in Latin America, generates a significant portion of its revenues in its country. However, until recently the company had to turn to the debt markets of the United States or Europe to meet its financing needs, as the national capital reserve was not deep enough.
"Before, as a company, if you had significant funding requirements, the truth is that the Mexican market did not provide it to you," said García Moreno. Now, Mexico "gave it to you," he said.
América Móvil, controlled by billionaire Carlos Slim and one of the largest companies in the region, has raised about $3 billion (2.859 billion euros) since launching its peso bond program in 2023, and its most recent transaction in March brought in about $1 billion (953 million euros).
The company has been the leading issuer of such bonds since 2023, according to data compiled by Bloomberg. Other peso-denominated borrowers include multilateral entities and international banks, the data shows.
The company has issued 5-, 7- and 10-year peso-denominated bonds and plans to increase its portfolio of local debt instruments. The yield on its long-term bond over comparable government securities has declined by about 22 basis points since it was issued, indicating strong investor demand for the company's debt.
América Móvil's peso-denominated instruments currently represent around 30% of the company's outstanding bonds, according to its latest quarterly report. Issuance in local currency may be cheaper for the company, García Moreno explained. The last time América Móvil issued dollar-denominated debt was in July 2022.
Going forward, América Móvil plans to issue peso-denominated debt two or three times a year. "This doesn't mean we won't do anything in other currencies, but we're going to prioritize peso-denominated issuances," the CFO said. The company is targeting a mix of foreign and local investors, with the latter accounting for about 60% of the debt sold in recent months.
América Móvil faces several maturities in the coming years, including peso- and euro-denominated bonds that mature in 2025, according to data compiled by Bloomberg. It makes sense for the company to rely on peso-denominated bonds, given that the domestic market accounts for about 40% of earnings before interest, taxes, depreciation and amortization.
