Event: Mexico

Mexico is looking to sell Samurai bonds this week, returning to the Japanese market for the first time in two years.The Latin American country is looking to issue yen-denominated notes in as many as six tranches, with maturities ranging from 3.5 years to 20 years, according to a person familiar with the matter who asked not to be identified.Pricing is expected for Aug. 28, and some tenors may be dropped depending on demand and market conditions, the person said. Initial price talks on the notes range from 100 to 200 basis points over Tokyo overnight average rate mid-swaps, depending on maturities, they added.The sovereign issuer last sold ¥152.2 billion ($1.05 billion) of notes in five tranches in August 2024, in keeping with its cadence of issuing Samurai debt every one and a half to two years.The new sale comes as the Mexico faces pressure on its credit ratings.In May, S&P Global Ratings revised its outlook on the nation to negative, citing persistently poor fiscal results, rising debt levels and weak economic growth. Moody’s Ratings echoed the concerns the same month, when it cut Mexico to the lowest tier of investment grade, adding that continued support for state-oil behemoth Petroleos Mexicanos is limiting the government’s ability to reign in debt.The Latin American nation is also facing turbulence on the trade front. The U.S. said in July it won’t renew the United States-Mexico-Canada Agreement, a free trade pact, choosing instead to conduct annual reviews.Since then, U.S.-Canada trade talks collapsed over a range of issues where the written text of a potential deal was at odds with what the Canadian side believed it had agreed to, Canadian Prime Minister Mark Carney’s top U.S. envoy said Sunday — raising questions about the state of Mexico talks.