Mexico · MARKETS
Key Facts
- —Issuer FONDO, the Guarantee and Development Fund for Agriculture, Livestock and Poultry Farming, a federal public trust.
- —Amount 4.5 billion pesos (4,500 million pesos) in long-term trust-issued exchange certificates.
- —Series FONDO 26 (1,337.5 million pesos), FONDO 26-2 (2,234.25 million pesos), and FONDO 26S (928.25 million pesos).
- —Tenors About 1.5 years for FONDO 26, 4.5 years for FONDO 26S, and 5.5 years for FONDO 26-2.
- —Rating Fitch assigned ‘AAA(mex)’, the highest domestic-scale rating, to all three series.
The trust, managed by Mexico’s central bank, tapped the local market with three bond series, including its first social bond.
The Mexico farm credit fund has sold its first long-term bonds on the Mexican Stock Exchange. The trust, known as FONDO, placed 4.5 billion pesos in three series, according to El Cronista.
What Is the Mexico Farm Credit Fund?
In fact, the Mexico farm credit fund is FONDO, the Guarantee and Development Fund for Agriculture, Livestock and Poultry Farming. It is a public trust of the federal government, not a bank or ministry.
FONDO is part of FIRA, a group of four federal trusts whose trustee is the Bank of Mexico, the central bank. FIRA lends and guarantees through commercial banks rather than directly to most borrowers.
FONDO is one of four trusts that form FIRA, alongside FEFA, FEGA, and FOPESCA. However, FONDO’s role is to guarantee and develop agriculture, livestock, and poultry.
The trust’s full name is the Guarantee and Development Fund for Agriculture, Livestock and Poultry Farming. However, it is commonly known by its short name, FONDO.
First Long-Term Bond Sale
In addition, the Mexico farm credit fund placed 4.5 billion pesos in long-term trust-issued exchange certificates, known as certificados bursátiles fiduciarios. This is the standard instrument Mexican public trusts use to borrow on the domestic capital market.
The operation is described as FONDO’s first long-term placement, according to noti. mx.
It was reported on Friday 21 August 2026. The Mexico farm credit fund sold the certificates on the Bolsa Mexicana de Valores, the main Mexican exchange.
However, the exact day of the placement was not confirmed in the research. The certificates are debt securities issued by a trust and listed on a Mexican exchange.
Investors buy the paper and are repaid with interest, as is standard for such instruments.
Three Bond Series With Different Terms
Meanwhile, the bonds were issued in three series, each with its own ticker. FONDO 26 raised 1,337.5 million pesos, FONDO 26-2 raised 2,234.25 million pesos, and FONDO 26S raised 928.25 million pesos.
The tenors vary by series. Overall, FONDO 26 has a term of about 1.5 years; FONDO 26S, about 4.5 years; FONDO 26-2, about 5.5 years.
In addition, this comes from a rating document filed with the exchange. FONDO 26S, the social bond, has a tenor of about 4.5 years.
In addition, FONDO 26-2 has the longest term at about 5.5 years. The three series add up to the 4,500 million peso total.
Meanwhile, the tenors range from about 1.5 years to about 5.5 years.
Fixed and Floating Rates
However, the Mexico farm credit fund structured the rates differently across the series. FONDO 26 pays a floating interest rate, while FONDO 26S and FONDO 26-2 pay fixed rates.
No specific coupon or reference rate was disclosed in the available information. The rate types were confirmed in the rating document.
FONDO 26’s floating rate means its interest payments will vary over time. Meanwhile, FONDO 26S and FONDO 26-2 offer fixed rates, providing predictable payments.
The floating rate for FONDO 26 means its payments will adjust over time. In contrast, the fixed rates for the other two series offer stable payments.
A Social Bond in the Mix
FONDO 26S is labelled a social bond, or bono social in Spanish. For example, social bonds are debt whose proceeds go to projects with a stated social benefit, such as lending to small producers.
The coverage describes it as a social bond, but no issuance framework or external review was found. The label itself was confirmed by El Cronista and noti.
mx. Social bonds are a growing category in Mexico’s capital markets.
Still, FONDO 26S is the only social bond in this placement. The social bond label indicates the proceeds are earmarked for projects with social benefits.
However, no issuance framework or external review was found.
Purpose of the Funds
The stated purpose of the money is to strengthen financing for agricultural and rural projects. Still, the operation is intended to support producers in the sector, according to El Cronista.
In short, the funds will help FONDO continue its mission of facilitating credit access for farming and related activities. The funds will help FONDO support producers in the agricultural and rural sectors.
As a result, the operation aims to strengthen financing for these projects. The funds are intended to strengthen financing for agricultural and rural projects.
As a result, they will support producers in the sector.
FONDO’s Role in FIRA
FONDO is the first and oldest of the four trusts that make up FIRA. FIRA was created in 1954, and the Bank of Mexico records that FONDO was the first trust set up.
The other trusts are FEFA, FEGA, and FOPESCA. In short, FONDO’s original aim was to depoliticise official credit to agriculture and bring commercial banks into that lending.
FIRA’s purpose is to facilitate access to credit through lending and guarantees. In addition, FONDO’s original aim was to root a culture of repayment in Mexico.
FONDO is the first and oldest of the four trusts that make up FIRA. Since its creation in 1954, it has been administered by the Bank of Mexico.
Historical Context
The FIRA system has a long history of reaching producers. The number of producers served rose from 6,678 in 1958 to 34,175 in 1970, according to the Bank of Mexico.
These figures are historical and not related to the current bond sale. They show the scheme’s growth over decades.
The FIRA system was created in 1954, with FONDO as its first trust. Since then, it has grown to include four trusts.
The number of producers reached by the scheme grew from 6,678 in 1958 to 34,175 in 1970. These figures show the system’s early expansion, though they are not current.
Separate FEFA Operations
Meanwhile, another FIRA trust, FEFA, has done its own placements this year. In July, FEFA placed 8,000 million pesos on BIVA, Mexico’s second stock exchange, not the BMV.
That operation is separate from the Mexico farm credit fund’s sale. FEFA also placed 7,017 million pesos in March, including a green bond, but those are not part of this deal.
FEFA’s July placement on BIVA was for 8,000 million pesos, a larger amount than FONDO’s 4,500 million. However, FEFA’s March operation included a green bond, not a social one.
FEFA’s July placement on BIVA was for 8,000 million pesos, larger than FONDO’s 4,500 million. Meanwhile, FEFA also placed 7,017 million pesos in March, including a green bond.
Frequently Asked Questions
What is the Mexico farm credit fund?
The Mexico farm credit fund is FONDO, a federal public trust that provides credit guarantees to agriculture. It is part of FIRA and is managed by the Bank of Mexico.
How much did FONDO raise in its first long-term bond sale?
FONDO raised 4.5 billion pesos in three series. The largest series, FONDO 26-2, raised 2,234.25 million pesos.
What is a social bond in this context?
A social bond is debt whose proceeds are used for projects with a social benefit. FONDO 26S is labelled a social bond, but no detailed framework was disclosed.
Who rated the bonds?
Fitch assigned a ‘AAA(mex)’ rating to all three series. This is the highest rating on Fitch’s Mexican national scale, meaning low credit risk relative to other Mexican issuers.
Connected Coverage
Sources: El Cronista; noti.mx; Bolsa Mexicana de Valores filings; PCR Verum; Diario Oficial de la Federación; Banco de México; FIRA.
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