BBVA Mexico places debt as Wall Street melts down

MEXICO CITY, Oct 8 (Reuters) - The Mexican unit of BBVA (BBVA.MC) said on Wednesday it issued 3 billion pesos in debt, despite a credit meltdown on Wall Street.

The bank, BBVA-Bancomer, said it placed the 10-year subordinated notes at a yield of 28-day TIIE MXTIIE1M=RR plus 0.65 percent.

TIIE, currently at 8.67 percent, is a benchmark commercial lending rate in Mexico.

BBVA said it would use the proceeds from the issue, equivalent to about $243 million, to bolster capital and to continue growth.

The U.S. financial market is in its worst crisis since the Great Depression as banks saddled with dubious subprime mortgage loans struggle to stay afloat.

In Mexico, banks owned by BBVA and other big international players, such as Citigroup Inc (C.N) and Santander (SAN.MC), have largely avoided turmoil from the credit crisis since their focus has been on traditional lending, not dabbling in risky subprime niches or unpredictable derivatives.

But in recent months, banks have become more careful about handing out new credit cards and consumer loans, sectors increasingly affected by nonperforming loans. ($1 = 12.37 pesos) (Reporting by Noel Randewich; Editing by Andre Grenon)