Mexico Issues Bond With Action Clauses
In a landmark deal in February, Mexico became the first sovereign to issue a global bond incorporating innovative collective action clauses. These legal agreements spell out the specific obligations of bond issuers and how investors' interests would be represented in the event of a debt restructuring process. The agreements have been the subject of intense debate in the capital markets after Argentina defaulted on its debt in December 2001. Mexico issued the $1 billion, 12-year bond on February 26, in a transaction led by Goldman Sachs and JP Morgan. The bond, which has an annual interest rate of 6.625% and a yield-to-maturity of 6.918%. It
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