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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Mexico Lures South American Debt Issuers, Led By Chileans

September 5, 2011

The Wall Street Journal, 9/5/11

Latin American companies are looking to Mexican financial markets to diversify their financing at more attractive terms than available in the U.S. or Europe.

Mexico’s economic links with the U.S., stable macroeconomic conditions and ease of access make the country an alluring alternative for obtaining financing, compared with tapping investors in developed countries, market participants said Monday.

Mexican pension funds have amassed sizable savings–about $125 billion at the end of July–and are actively seeking to diversity their investments.

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Mexico Federal Government To Help States Refinance Debt

August 14, 2011

The Wall Street Journal, 8/14/11

Mexico’s Finance Minister, Ernesto Cordero, said Sunday that the federal government plans to help state governments refinance their debt with guarantees from the state development bank Banobras.

“Although the debt of the states isn’t a generalized problem, at 2.5% of gross domestic product, there are some states that need to carry out refinancing operations to improve their financial position,” Cordero said in a statement read on a webcast.

The help would involve guarantees from the public works development bank Banobras, and the government is already working with some states that need to improve their debt profiles, he said.

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Mexico Needs to Find New Revenue Sources, S&P Says

August 31, 2009
Photo by Flickr user Aleiex

Photo by Flickr user Aleiex

Reuters, 9/02/09

Aug. 31 (Bloomberg) — Mexican President Felipe Calderon must create new sources of revenue to offset declining oil income if the country is to avoid a downgrade of its debt rating, Standard & Poor’s analyst Lisa Schineller said.

S&P may cut Mexico’s BBB+ status before the end of the year, depending on how Calderon and legislators address ways to boost tax collection when they discuss the 2010 budget next week, Schineller said in an interview. That’s more important in assessing the country’s capacity to pay debt than any increase in the budget deficit, which economists say may widen to 3.5 percent of gross domestic product from 3 percent this year.

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Cemex Struggles To Lighten Debt Load

June 18, 2009

CEMEX_altaAssociated Press, 6/18/2009

Strained by $18 billion in debt and uncertainties about refinancing negotiations, Cemex, the third-largest cement producer in the world, could use some of its own product to shore up its foundation after years of aggressive acquisitions.

Cemex ( CX – news – people ) shelled out $15 billion in 2007–at what turned out to be the tail end of the building boom–to buy Rinker, the Australian building materials group. The subsequent collapse of the U.S. housing market eviscerated demand, leaving Cemex struggling to handle the debt it incurred in the deal.

The Mexico-based company has been forced to shed jobs and assets, and it is in its second round of refinancing.

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