The Administration of President Enrique Peña Nieto has stressed its commitment to consolidate macroeconomic stability, to count with healthy public finances and to make responsible use of public debt. In this regard, and in order to maintain and strengthen public debt’s management communication and transparency, the Ministry of Finance and Public Credit (SHCP) announces the government securities auction calendar for the first quarter of 2016.
This schedule is consistent with the Economic Program approved by Congress for the 2016 fiscal year and with the 2016 Annual Borrowing Plan. The government securities auction programs for 2016 contemplates a 0.5% reduction in the budget deficit during 2016, hence a reduction in the Federal Government net indebtness.
The most important aspects of the government’s securities issuance strategy for the first quarter of 2016 are the following:
The Federal Government will continue with the mechanism to announce a minimum and a maximum amount of 28-day and 91-day Cetes to be issued weekly. The specific amount to be issued each week of 28 and 91-day Cetes will be specified in the corresponding auction announcement of the Central Bank.
During the first quarter of 2016, the ranges for 28 and 91-day Cetes will remain unchanged. The 28-day Cetes weekly minimum and maximum issuance amount will be 4,000 and 11,000 million pesos, respectively and in the first week of the quarter, 5,500 million pesos will be auctioned. The 91-day Cetes weekly minimum and maximum issuance amount will be 7,000 and 14,000 million pesos and in the first week of the quarter, 9,500 million pesos will be auctioned.
The amounts to be issued for 182 and 364-day Cetes and Fixed-Rate Bonds (3, 5, 10, 20 and 30 year) will remain unchanged.
The amounts of the 3, 10 and 30-year Udibonos are decreased by 50 million udis each.
The auction amount of 5-year Bondes D will decreased by 500 million pesos compared with the previous quarter resulting in 4,500 million pesos.
As previously announced, syndicated auctions are now conducted using a flexible format. This format allows the Federal Government to choose the right timing for each transaction based on investors’ appetite and market conditions. These auctions are not part of the amounts announced for the quarterly calendars nor as substitutes of primary auctions. Once the new references are issued, the reopening policy will continue.
The auctions of stripped 30-year Udibonos will continue to take place every 12 weeks. The amount to be auctioned will be announced the week prior to the transaction.
The auctions of Cetes, Nominal Fixed-Rate Bonds, Udibonos, Bondes D and the auctions of stripped Udibonos to be executed in the first quarter will have the following characteristics. (PDF)
Exchange and Repurchase Transactions
The Ministry of Finance may execute exchange and repurchase transactions of government securities during the first quarter of 2016. These transactions may include different instruments that have been issued. So, multiple exchange and repurchase transactions may be carried out as long as the market conditions are conducive to their successful execution.
In case one of these transactions is executed, the Ministry will specify, through the Central Bank, the instruments, terms and size of each transaction.