Sovereign Report

Sep 1, 2001

Mexico Stands Apart
Moody's Investors Service raised its rating outlook for Mexico to positive from stable last month. It currently rates the sovereign Baa3, the lowest investment grade rating. Standard  &  Poor's still rates Mexico one notch below investment grade at BB+, with a positive outlook. Moody's said the change in outlook, "Mostly reflects the continued integration of the country into the North American economic zone." It said this has strengthened the resilience of its economy to external shocks and, in particular, to emerging market contagion. Shortly before this, Mexico issued a heavily oversubscribed $1.5 billion, 30-year benchmark global bond aimed mainly at US high-grade investors. Salomon Smith Barney and Goldman Sachs managed the deal. The issue was upsized from $1 billion after receiving $3 billion in orders. The bond was launched at 355 basis points over US Treasurys with...

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