Key facts
- Mexican lender Banorte raised $1.35 billion in hybrid debt.
- The debt was issued in two tranches of perpetual additional tier 1 (AT1) notes.
- The first tranche of $600 million has a coupon of 8.0% and is callable after 6.5 years.
- The second tranche of $750 million has a coupon of 8.45% and is callable after 10 years.
- Banorte shares fell 1.5% on the day the issuance was announced.
Mexican financial institution Banorte announced on Wednesday that it successfully raised $1.35 billion in international markets through the sale of hybrid debt. The issuance, split into two tranches of perpetual additional tier 1 (AT1) notes, underscores investor appetite for higher-yielding bank paper from Latin America.
The first tranche amounted to $600 million, featuring a coupon of 8.0% and callable after 6.5 years. The second tranche comprised $750 million with a coupon of 8.45%, callable after 10 years. According to financial outlet IFR, which cited Banorte's roadshow presentation, the bank sought to capitalize on an opportunistic window and utilize the two-part structure to smooth its call schedule.
Following the announcement of the debt issuance, Banorte's shares closed down approximately 1.5% on Wednesday.