Mexico weighs taking on Pemex pension liabilities

July 30, 2014
07/30/14 Financial Times
piggy bank with coinsMexico is poised to increase its public debt at a time of sluggish economic growth, as the government considers taking some of Pemex’s giant pensions liabilities on to its own balance sheet.

The move comes amid a sweeping reform of the energy and power sectors that will see the state oil company as well as utility CFE transform into “state productive enterprises” by the end of next year, competing with private investment.

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Mexico’s Pemex sees record demand for latest debt issuance

June 27, 2014

06/26/14 Reuters

pemex2Mexico’s state-run oil company Pemex said on Thursday it had record demand for its latest local debt issuance which was oversubscribed nearly four-fold.

Investors aiming to purchase three separate Pemex debt offerings worth a total of 15 billion pesos ($1.15 billion) pledged 57.5 billion pesos, or 3.8 times the amount issued, Pemex said in a statement.

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A new offering for Mexico’s hopeful college grads: student loans

June 4, 2013

education - pile of booksSmartPlanet, 6/4/2013

Unlike in the U.S., where student loans are run of the mill, few Mexicans have access to the financing that could help them pay for a college education. Mexicans aspiring to middle-class status increasingly see university education as a must. Yet an over-saturated public university system accepts just a fraction of applicants, and many aspirants lack the means to pay for private college. That’s where FINAE, an institution specializing in financing higher education, comes in.

In a credit market for higher education still in its infancy, FINAE is serving a population that traditional banks have mostly ignored: students who are the first in their family to attend college, whose families fall into a bracket with middle-class aspirations, if not income. Parents think about education like an inheritance, says Celia Guerra, director of financial aid at Mexico’s private Universidad Panamericana, which facilitates FINAE credits. She says parents tell her: “Since I don’t have money, all I can leave my children is an education so that they can get ahead on their own.”

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Mexico upgrade could only come after reforms approved, reviewed: S&P

May 24, 2013

increase bar chartReuters, 5/23/2013

Standard & Poor’s could decide to boost Mexico’s debt rating only if the government approves a raft of ambitious reforms and the measures are effective, credit analyst Joydeep Mukherji said on Thursday. Mexico’s major parties signed a pact last year to push long-sought measures through the country’s divided Congress, including reforms to boost the country’s paltry tax take and raise production at ailing state-owned oil monopoly Pemex PEMX.UL.

Earlier this month, Fitch Ratings upgraded Mexico’s sovereign foreign currency credit rating by one notch to BBB-plus, pointing to the country’s solid economic foundations and welcome progress on reforms. But S&P’s Mukherji said his agency would only consider an upgrade after the reforms were approved and could be evaluated for their impact.

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From Mexico, Some Lessons for Europe

April 10, 2013

globe - blueThe New York Times, 4/9/13

I was in Mexico City in the summer of 1981, just out of high school, when Mexico’s president, José López Portillo, announced he would defend the peso “like a dog” against speculative attacks. His approach to economics was unorthodox but creative. He tried to raise oil prices by sheer force of will — firing the director of the state oil company Pemex for having the temerity to reduce the price of Mexican crude as oil plummeted on international markets. He froze dollar accounts in local banks to try to stem capital flight.

But the canine defense didn’t work. In 1982, interest on foreign debt swallowed almost two-thirds of the country’s export revenue. In February, Mexico’s currency started plummeting. In August, Jesús Silva Herzog, Mexico’s finance minister, flew to Washington to tell Paul Volcker at the Federal Reserve and Donald Regan at the Treasury Department that Mexico could not make its coming payments to American and other foreign banks.

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Mexico has the lowest tax collection in Latin America (Spanish)

February 20, 2013

50-pesosExcelsior, 2/20/2013

México es uno de los países con los niveles de recaudación más baja en América Latina, incluso “estamos por debajo de Haití después del terremoto”, informó el experto Jorge Alatorre Flores.

El secretario del Instituto de Investigación en Política Pública y Gobierno del Centro Universitario de Ciencias Económico Administrativas (CUCEA) explicó que el pago de impuestos está concentrado en la Población Económicamente Activa (PEA) formal.

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Mexico passes law to lift lid on murky state finances

November 7, 2012

Reuters, 11/6/2012

When Samuel Chacon took over as mayor of the southern Mexican border town of Tapachula last month, he found the equivalent of about 40 cents in the council’s bank account and debts of more than $38 million.

In a move aimed at preventing such surprises, the Mexican Congress on Tuesday approved a new law that will shine a spotlight on the murky world of state and municipal finances, closing loopholes allowing potential misuse of public funds and forcing governments to track spending, publish budgets online and reveal their debts.

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