Mexico Expected to Remain Latin America's Top Borrower

Mexico is seeking to step up overseas borrowing in 2012 after raising $3 billion this year from international offerings, more than any other country in Latin America. Borrowing is bringing a large amount of investment into Latin America’s second-biggest economy.

After raising $3 billion this year from international offerings -- more than any other country in Latin America -- Mexico is looking to keep steady, and improve, its overseas borrowing in 2012. According to the budget proposal presented on Sept. 8, Mexico's government is asking Congress for authorization to boost net external debt by $7 billion in 2012, up from the $5 billion increase it was granted for this year. But how does this compare to other emerging economies such as Brazil or Colombia?

It's reported that while these countries are making debt sales abroad to eschew gains in their currencies, in the mean time Mexico has been tapping into global markets to lock in record-low borrowing costs in the U.S.

Mexico has sold $15 billion of bonds outside its local market since 2009, up from $7 billion in the previous three years, while Brazil cut its sales 12 percent over that period to $6.9 billion. A lack of “high-quality sovereign debt” issues from developing nations will help fuel demand for more Mexican bonds, said Jeremy Brewin, who helps manage about $3.5 billion in emerging-market debt with Aviva Investors in London. “The appetite for external sovereign debt is quite robust so for Mexico to issue an extra $7 billion, I don’t think that’ll be a challenge,” he said.