Guarantee for Privately Placed Bonds Issued by Mexico
Samurai Bond Issue based on Framework Agreement

• Region: Latin America and the Caribbean
• Others
• Guarantees

1. The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)^*1 signed on December 18 a set of agreements to provide a guarantee for yen-denominated foreign bonds (Samurai bonds)^*2 issued by the Government of the United Mexican States. This issue was a private placement denominated in Japanese yen totaling 150 billion yen, with JBIC providing a guarantee for the principal as well as part of the interest. Participants in this issuance include Daiwa Securities SMBC Co. Ltd. and Nomura Securities Co., Ltd. as joint lead arrangers, as well as The Bank of Tokyo-Mitsubishi UFJ, Ltd. as a bond administrator.
    
2. JBIC signed a framework agreement with the Government of the United Mexican States on December 10. The issuance is based on this framework agreement in which JBIC committed to provide guarantee cover in the amount of up to 150 billion yen for Mexico's sovereign Samurai bonds.^*3
    
3. Facilitating Samurai bond issuance is part of JBIC's efforts to respond to the financial crisis. Credit enhancement offered by JBIC with guarantee provision will help diversify funding sources for the Mexican government and thus contribute to the stabilization of the country's economy. JBIC's support for Samurai bond issuance in the Tokyo bond market will also offer a wide range of investment opportunities to Japanese investors and is thereby expected to invigorate the Samurai bond market.
    
4. "Responding to disruptions in financial order in the international economy" is one of the functions JBIC is expected to perform in its mission. Thus JBIC has been responding to the global financial squeeze since 2008 by drawing on its range of financial instruments. JBIC will continue to make vigorous efforts in this area.

Note

1. *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui).
2. *2 Samurai bonds are yen-denominated bonds issued by a foreign government or company in the Tokyo bond market.
3. *3 See Press Release on December 11, 2009.
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