Mexico’s State Power Company Wants to Borrow Up to US$1.2 Billion at Home, Some of It for Forty Years

Mexico · Energy

Key Facts

  • The sizeUp to 20 billion pesos, about US$1.2 billion, across three bonds sold at the same time.
  • The tranchesThree years at a floating rate, ten years at a fixed rate, and forty years linked to inflation.
  • The recordForty years would be double CFE’s longest local bond to date, a twenty-year issue sold in November 2022.
  • The structureThe three share one ceiling — demand can shift money between them, but the total cannot exceed the cap.
  • The ratingS&P Global Ratings has assigned its top national mark, mxAAA, to the proposed issues.
  • The purposeMostly refinancing: bonds maturing in the second half of 2026 and short-term bank loans.
  • Still unknownWhether it has priced, at what rates, through which banks, and on which of Mexico’s two exchanges.

Three bonds, one pot of money, and a forty-year tranche that would double the record for a Mexican corporate borrower.

Mexico’s state electricity company is preparing to sell three bonds at once in its home market. The CFE peso bond plan is for up to 20 billion pesos — roughly US$1.2 billion at Wednesday’s rate of about 16.95 pesos to the dollar — and almost all of it is meant to replace debt the company already owes. The eye-catching part is the last tranche, which runs forty years.

What the CFE peso bond plan contains

Three separate securities, sold together, each aimed at a different kind of buyer. What follows comes from reporting of an S&P Global Ratings action on the proposed issues, published on 18 August; the Comisión Federal de Electricidad has not put out its own announcement, and the detail below has not been independently confirmed.

The first, CFE 26X, runs three years and pays a floating rate tied to TIIE de Fondeo, the overnight funding reference rate the Bank of Mexico publishes, compounded across coupon periods of 28 days. That suits treasurers and money funds who want their cash back soon and no view on where rates go.

The second, CFE 26-2X, runs ten years at a fixed rate paid twice a year — the conventional slot, where pension funds and insurers buy a known coupon.

The third, CFE 26U, runs forty years and is denominated in UDIs, accounting units published by the central bank that move with Mexican inflation. Its coupon is a fixed real rate: the holder receives that percentage on top of whatever inflation turns out to be.

All three would repay principal in a single payment at maturity rather than in instalments.

Forty years would be a Mexican record

This is the part worth pausing on. CFE’s longest local bond so far runs twenty years — a November 2022 issue that the company itself described at the time as the first corporate bond of that duration in Mexico’s public debt market. Its inflation-linked tranche last year ran fifteen.

Doubling that to forty would set a new benchmark for a Mexican corporate borrower, not just for CFE. Whether it happens depends entirely on whether the domestic pension funds show up, because they are effectively the only buyers in the country with liabilities that long.

It is also, precisely because it is a first, the claim in this deal most worth waiting on. A forty-year tranche described in a ratings note is not the same thing as a forty-year tranche sold.

One pot, three taps

The sale uses what the Mexican market calls vasos comunicantes — communicating vessels. Several series are offered in parallel under a single overall ceiling. If investors pile into the ten-year and ignore the three-year, the issuer can move size between them. What it cannot do is exceed the combined cap.

CFE has used the format in every local deal for years, and Pemex did the same in January with an almost identical line-up: a floating tranche, a fixed nominal tranche and a UDI tranche, all repaying at maturity. The practical effect is that the issuer finds out where the demand is rather than guessing in advance.

The three series sit under CFE’s long-term certificados bursátiles programme, which carries a ceiling of 100 billion pesos, about US$5.9 billion. That programme is revolving, so capacity is restored as earlier issues mature — the ceiling caps what can be outstanding at once, not what can be sold over the programme’s life.

Where the money goes, and what is still unknown

Mostly backwards, not forwards. The proceeds are described as refinancing certificados bursátiles maturing in the second half of 2026 and repaying short-term bank credit, with the remainder going to long-term investment projects and the maintenance and service contracts attached to them. That matches what CFE did with its last two local deals.

It is a debt-management exercise, and a necessary one. Moody’s Local México puts CFE’s total debt at about 1.92 trillion pesos as of the first quarter, with roughly 275 billion pesos of bank and market debt amortising across 2026 to 2028.

What has not been published is almost everything a buyer would want: final amounts per series, clearing rates, the spread over TIIE for the floating tranche, the real rate on the forty-year, and the banks running the books. Only S&P has acted publicly on these series; CFE’s outstanding local paper carries AAA (mex) from Fitch and AAA.mx from Moody’s Local México, but neither agency had published on these particular issues.

Nor is the venue settled. Filings described in July pointed to BIVA, where CFE placed its last local deal in October 2025; the August report places the three series on the Bolsa Mexicana de Valores. Ratings notices for Mexican issuers are posted on the BMV’s document portal whatever the listing venue, which is a common source of this confusion.

On last year’s timetable — S&P rated the 2025 series in late August and CFE priced them at the end of September — a sale is likely weeks away rather than overdue.

Why this matters if you live in or invest in Latin America

CFE generates around 72% of Mexico’s electricity, holds the transmission and distribution monopoly and reaches virtually the whole population. It is also one of the country’s largest peso borrowers, so what it pays sets a reference point other Mexican issuers are measured against.

For anyone holding Mexican fixed income, the forty-year inflation-linked tranche is the one to watch. Demand for it would tell you whether domestic pension funds still want very long-dated Mexican risk — and those funds are the deepest pool of savings in the country.

For everyone else the read is simpler. A refinancing of this shape says the company can still fund itself in its own currency without going abroad. That has not always been true of Latin American state utilities, and it is not true of all of them today.

Frequently Asked Questions

How big is the CFE peso bond plan?

Up to 20 billion pesos, about US$1.2 billion at roughly 16.95 pesos to the dollar, split across three series sold at the same time under a single combined ceiling. As of Thursday 20 August no results had been published, so the amount actually placed in each series is not known.

What are the three tranches?

CFE 26X runs three years at a floating rate tied to TIIE de Fondeo, the Bank of Mexico’s overnight funding reference, with 28-day coupon periods. CFE 26-2X runs ten years at a fixed rate paid twice a year. CFE 26U runs forty years, is denominated in inflation-linked UDIs and pays a fixed real rate twice a year. All three would repay principal in one payment at maturity.

Would a forty-year bond be unusual?

Very. CFE’s longest local bond to date runs twenty years, sold in November 2022 and described by the company as the first of that duration in Mexico’s public debt market. A forty-year issue would double that benchmark for a Mexican corporate borrower, which is why it depends on domestic pension fund demand.

What rating do the bonds carry?

S&P Global Ratings has assigned mxAAA, its top national-scale mark, to the proposed issues. CFE’s outstanding local certificados bursátiles carry AAA (mex) from Fitch Ratings and AAA.mx from Moody’s Local México, but neither agency had published an action on these specific series. National-scale ratings rank credit quality against other Mexican issuers rather than globally.

Connected Coverage

Sources: Revista Fortuna, 18 August 2026 — S&P Global Ratings assigns mxAAA to CFE’s proposed certificados bursátiles of up to 20,000 million pesos with tenors of up to 40 years; El Cronista México, 22 July 2026 — CFE prepares a placement at BIVA under its 100,000 million peso certificados bursátiles programme; Moody’s Local México — CFE rating report, 30 July 2026

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error