Sta$s$cs on External Debt Issued by Mexican Companies

Transcription

1 Sta$s$cs on External Debt Issued by Mexican Companies Macroeconomic Analysis Division, May 1

2 Introduc)on Following the - 9 financial crisis, the prolonged period of extremely low interest rates in advanced economies, vast liquidity in interna$onal markets, and the search for yield by global investors, resulted in significant capital inflows to emerging economies. In Mexico, the greater availability of financial resources from abroad in the post- crisis period was reflected in a notable expansion of corporate bonds issued in interna)onal debt markets. The expected process of normaliza)on of monetary policy in advanced economies, par)cularly in the U.S., is likely to lead to )ghter financing condi)ons in interna$onal markets. In this context, it is important to evaluate how poten)al external shocks (e.g., to market exchange and interest rates) could impact the balance sheets of Mexican firms, especially those that may have increased their liabili$es in foreign currency through a more ac$ve par$cipa$on in interna$onal debt markets.

3 Introduc)on To accurately assess the magnitude of these risks, it was necessary to collect micro- level data on the main features of individual external debt placements by Mexican firms, as well as detailed informa)on on their balance sheets. The process of collec)ng these data brought to light some data gaps and data- gathering difficul)es that are highlighted in this presenta)on. 3

4 Index 1. External Debt Issued by Mexican Companies 1.1 Sources of Informa)on 1. Recent Evolu)on. Data Limita)ons and the Road Ahead

5 Debt Issuance Terms In order to build a dataset with the relevant features of the universe of bond placements abroad by Mexican companies, we first collected data from global financial informa$on services firms. The main data provider is Bloomberg. This informa$on was compared and enhanced with data retrieved from other financial informa$on services firms such as Valmer, as well as from regulatory agencies from abroad (e.g., the U.S. Securi$es and Exchange Commission). Finally, we complemented these data with informa$on available in individual bond prospectuses (a highly $me- consuming and ar$sanal task yet achievable given the rela$vely low number of firms that par$cipate in interna$onal debt markets). 5

6 Corporate Debt Issued by Mexican Companies Abroad Firms Balance Sheets The only firms that are required to periodically issue full financial reports are those listed on the Mexican Stock Exchange (BMV). This informa$on is available to the general public and may be retrieved through companies that provide financial informa$on services such as Bloomberg and Infosel or directly through the BMV. However, there are firms that issue debt interna$onally that are not listed on the BMV, and hence their financial reports are not necessarily readily available.

7 Corporate Debt Issued by Mexican Companies Abroad Number of Mexican Corpora)ons with Bond Placements in Interna)onal Markets in - 1 Number and percent Gross Bond Issuance by Mexican Corpora)ons in Interna)onal Markets in - 1 USD billion and percent 3% 8. 1% % % Listed Not listed Listed Not listed Source: Prepared by Banxico based on informa$on from Bloomberg and Mexican Stock Exchange (BMV). 7

8 Index 1. External Debt Issued by Mexican Companies 1.1 Sources of Informa)on 1. Recent Evolu)on. Data Limita)ons and the Road Ahead 8

9 Total External Financing to Corpora)ons in Mexico 1/ Constant USD billion (Dec.13=1) Debt Issuance in Interna)onal Markets and External Credit to Corpora)ons in Mexico 1/ Percent of GDP 1 1 Credit Debt Total 1 Non- financial corporations Banks Source: Banco de México. Source: Banco de México. 9

10 Amount Outstanding of Corporate Debt Issued by Mexican Corpora)ons in Interna)onal Markets 1/ Percent of GDP 5 Rest Top 5 firms / / 1 Source: Prepared by Banxico based on informa$on from Bloomberg. 1/ Includes bonds issued overseas by non- financial private corpora$ons at maturi$es greater than one year. / The five firms with the highest average amount outstanding of corporate debt issueb abroad between and 1. 3/ Includes informa$ón up to April 3th 1. 1

11 Net Bond Issuance by Mexican Corpora)ons in Interna)onal Markets 1/ Quarterly accumulated net flows in USD billion Gross Bond Issuance by Mexican Corpora)ons in Interna)onal Markets 1/ USD billion / I II III IV / 1 8 Source: Prepared by Banxico based on informa$on from Bloomberg. 1/ Includes bonds issued overseas by non- financial private corpora$ons at maturi$es greater than one year. / Includes informa$ón up to April 3th 1. 11

12 Number of Bond Issuances of Mexican Corpora)ons in Interna)onal Bond Markets Par)cipa)on of Mexican Corpora)ons in Interna)onal Bond Markets 1/ Number of par)cipa)ng firms / / Source: Prepared by Banxico based on informa$on from Bloomberg. 1/ The database has informa$on since 199, which means that new entrants for each year are those that issued bonds in interna$onal markets in the corresponding period but had not done so since 199.The number of firms that match this criteria is represented by the white figure inside each column. / Includes informa$ón up to April 3th 1. 1

13 Gross Bond Issuance by Mexican Corpora)ons in Interna)onal Markets by Sector 1/ Percent 1% Energy Consumer discretionary & Services Consumer staples 9% 8% 7% % 5% Industrials Materials Telecommunication services Gross Bond Issuance by Mexican Corpora)ons in Interna)onal Markets by Grade 1/ USD billion A BBB BB B CCC- D NR % 3% % 1% 8 % Source: Prepared by Banxico based on informa$on from Bloomberg. 1/ Includes bonds issued overseas by non- financial private corpora$ons at maturi$es greater than one year. / Includes informa$ón up to April 3th 1. / Source: Prepared by Banxico based on informa$on from Bloomberg. 1/ Corresponds to the grade awarded to the issuer in the corresponding foreign market. / Includes informa$ón up to April 3th 1. / 13 1

14 Gross Medium- Term Bond Issuance by Mexican Corpora)ons by Market 1/ USD billion and percent Annual Interest Rates of Medium- Term Securi)es Issued by Mexican Corpora)ons Percent International market 1 Domestic market 1 1 Percent in international markets Domestic market International market / Source: Prepared by Banxico based on informa$on from Bloomberg and Indeval. 1/ Includes firms that have issued debt in both interna$onal and domes$c debt markets since. / Includes informa$ón up to April 3th 1. Source: Bloomberg and Indeval. 1

15 Average Amount Issued by Mexican Corpora)ons by Market 1/ USD billion International market Domestic market Gross Bond Issuance by Mexican Corpora)ons in Interna)onal Markets by Currency USD billion Other MXN USD 1/ / Number of Bond Issuances of Mexican Corpora)ons in Interna)onal Bond Markets by Currency Other MXN USD / 1/ / / Source: Prepared by Banxico based on informa$on from Bloomberg and Indeval. 1/ Includes firms that have issued debt in both interna$onal and domes$c debt markets since. / Includes informa$ón up to April 3th 1. Source: Prepared by Banxico based on informa$on from Bloomberg. 1/ Includes chilean peso, Hong Kong dollar, yen and pound sterling. / Europesos. 3/ Includes informa$ón up to April 3th 1. Source: Prepared by Banxico based on informa$on from Bloomberg. 1/ Includes chilean peso, Hong Kong dollar, yen and pound sterling. / Europesos. 3/ Includes informa$ón up to April 3th 1. 15

16 Gross Bond Issuance by Mexican Corpora)ons in Interna)onal Markets by Use of Proceeds 1/ USD billion Number of Bond Issuances of Mexican Corpora)ons in Interna)onal Bond Markets by Use of Proceeds 1/ Refinance debt / Corporate purpose 3/ Investment / Others 5/ Not disclosed Refinance debt / Corporate purpose 3/ Investment / Others 5/ Not disclosed Source: Prepared by Banxico based on informa$on from Bloomberg. 1/ Whenever firms report more than one use of proceed, the amount issued is divided by the number of different use of proceeds. The same procedure applies to the number of bond issuances. / Includes bond exchange, short term debt payment, loan payment and repay/ refinance debt. 3/ The firm only reports general corporate purposes. / Investment projects, acquisi$on financing and plant equipment construc$on. 5/ Includes interbank loans, share buybacks and bridge loan payments. 1

17 Domes)c Commercial Bank Credit to Mexican Corpora)ons 1/ Real annual change in percent Total SMEs Source: Banco de México. 1/ Includes credit from commercial banks to non financial private firms. 17

18 Payment Due by Year of Maturity 1/ USD billion Payment Due by Year of Maturity/ Number of Firms with Bonds Maturing 1/ USD billion Foreign Currency Liabili)es of Corpora)ons Listed in the BMV 1/ Medium- term to short- term ra)o Millares Millares Source: Prepared by Banxico based on informa$on from Bloomberg. Source: Prepared by Banxico based on informa$on from Bloomberg. Source: Prepared by Banxico based on informa$on from Bloomberg and Indeval. 1/ Short- term liabili$es have maturi$es of one year or under. Only includes non- financial private firms. 18

19 Traded Volume in the Global Foreign Exchange Market 1/ Share of traded volume Exchange Rate Deriva)ves Transac)ons in the Mexican Market 1/ Monthly average, USD billion Brasil Chile 3. 3 China Colombia Corea México India Polonia.5 5 Rusia R. Checa Turquía Source: Triennial Central Bank Survey, BIS. 1/ Because two currencies are involved in each transac$on, the sum of the percentage shares of individual currencies totals % instead of 1%. Observa$ons correspond to April of each year. Source: Banco de México. 1/ Includes swaps, futures and forwards transac$ons in the Mexican deriva$ves market (MexDer and over- the- counter). 19

20 Implicit One- Year Foreign Exchange Vola)lity 1/ Index (=1) Equity Price of Selected Firms 1/ Index (=1) 35 3 AMX CEMEX TELEVISA VITRO ene- 7 jul- 7 ene- 8 jul- 8 ene- 9 jul- 9 ene- 1 jul- 1 ene- 11 jul- 11 ene- 1 jul- 1 ene- 13 jul- 13 ene- 1 ene- 7 jul- 7 ene- 8 jul- 8 ene- 9 jul- 9 ene- 1 jul- 1 ene- 11 jul- 11 ene- 1 jul- 1 ene- 13 jul- 13 ene- 1 Source: Bloomberg. 1/ Shaded areas represent periods of high exchange rate vola$lity.

21 Index 1. External Debt Issued by Mexican Companies 1.1 Sources of Informa)on 1. Recent Evolu)on. Data Limita)ons and the Road Ahead 1

22 Data Limita)ons The effort to expand and homogeneize financial data for firms that issue debt interna$onally has increased our ability to analyze the structure of their balance sheets and the poten$al impact of external shocks to their performance. Nonetheless, there is s$ll room for improvement. Financial reports of listed firms do not have a full disclose of assets and/or income by currency, which make difficult to assess their natural hedges, e.g., vis- à- vis exchange rate risk. Also, listed firms do not provide accurate informa$on on their use of financial deriva)ves to hedge risk. The increase in the volume of transac$ons in Mexican deriva$ve markets may suggest that firms do indeed hedge against exchange rate, interest rate, and other types of risks. However, it is currently difficult to evaluate the extent of these hedges. Although firms tend to provide informa)on on what use they give to funds obtained through bond issues, their reports are in many cases ambiguous (e.g., reported use is for general corporate purposes ). In some cases, this informa$on is not disclosed at all.

23 The Road Ahead The data we have summarized in this presenta$on represent an important tool to evaluate the risks that Mexican corpora$ons may face if financing condi$ons in interna$onal markets become $ghter in the short to medium term. We are currently implemen$ng further stress tests aimed at assessing the impact of interest rate and exchange rate shocks on firms balance sheets. The lack of detailed informa$on on firms hedging strategies means that the result of these exercices should be taken with a grain of salt. Even if we had detailed informa$on on firms hedges, we would not know if the risk is concentrated on the other side of the market (e.g., in the extreme case of a single financial ins$tu$on providing risk coverage). The analysis of the shocks associated to )ghter financial condi)ons would be significantly improved if the limita)ons on the data available were overcome. 3

24 The Road Ahead As the financial system in Mexico develops and becomes more diversified, the need for an informa$on system capable of gathering these data will become more pressing. Standardiza$on of informa$on is key in order to complement the automa$za$on of data gathering.

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