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Mexico gets into the short -term bond business
By HELEN HUNTLEY
Published February 13, 2006
Floridians get a new way to invest in Mexico today, although it won't come with the high-yield payoff one might expect. Our neighbor across the Gulf of Mexico is now selling short-term bonds to retail investors, priced in U.S. dollars.
Over the next two years, Mexico hopes to sell $1.5-billion worth of the retail bonds in $1,000 increments through U.S. brokerages, including Merrill Lynch, Charles Schwab, Citigroup and St. Petersburg-based Raymond James & Associates.
Mexico is the first foreign government to launch this type of retail program, which about 30 U.S. corporations have used to raise more than $1.5-billion. The bonds available will vary from week to week.
The country's BBB-credit rating makes the debt investment grade, which means it is likely to yield just a little more than U.S. Treasuries of similar maturities, perhaps 0.75 to 1 percent, said Tom Ricketts, CEO of Incapital, a Chicago investment bank managing the offering along with Banc of America Securities. That likely would put yields between 5 and 6 percent for two- to five-year bonds.
"Most investors are not aware of just how well the Mexican economy and the Mexican government has done over the last six or eight years," Ricketts said. "It will be an education process for us."
[Last modified February 13, 2006, 00:45:19]
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