White & Case Advises FEFA on the First Mexican Corporate Bond Issuance Linked to the New Mexican Overnight Risk-Free Rate (TIIE de Fondeo)

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Global law firm White & Case LLP has advised Fondo Especial para Financiamientos Agropecuarios (FEFA) on the first Mexican bond issuance linked to the Mexican overnight risk-free rate (TIIE de Fondeo), for an aggregate amount of MXN 5 billion (approximately US$250 million), divided into two tranches. 

The TIIE de Fondeo is a recently created Mexican overnight risk-free rate that complies with the International Organization of Securities Commission (IOSCO) Principles on Financial Benchmarks. FEFA’s bond is the first corporate bond in the Mexican market to use this alternative reference rate, and is expected to encourage other Mexican issuers and help set the transition forward to risk-free rates across the market. 

The bonds were placed via a local public placement in Mexico on the Mexican Stock Exchange, Bolsa Mexicana de Valores (BMV). 

Established in 1965, FEFA is the Mexican governmental development agency dedicated to financing the agriculture sector. It offers financing, subsidies and other services for production, recollection and distribution of goods and services through long-term financing for the acquisition of machinery, equipment and installations, among others. FEFA is integrated as part of Trust Funds for Rural Development (FIRA), which operates as a second-tier development bank that offers credit and guarantees, training, technical assistance and technology-transfer support to the agriculture, livestock, fishing, forestry and agribusiness sectors in Mexico.

White & Case has advised FEFA on all of its bond issuances since 2016.

The White & Case team in Mexico City was led by partner Manuel Groenewold and counsel Eric Quiles, and included associates Simon Micha and Viridiana Alanis.

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