A City Sidesteps Federal Help

A City Sidesteps Federal Help

Mexico

The quest for money to build a water treatment plant led a Mexican city to devise a new financing mechanism that may help raise money for local government projects in Mexico and elsewhere in Latin America. Tlalnepantla is a municipality in metropolitan Mexico City that is home to many industrial plants and has a AA local credit rating. Bankers at Protego, a Mexican boutique, used the city's water revenues to back bonds issued to pay for the plant to create the first credit-enhanced security ever issued by a Mexican municipality.  In early 2002 Tlalnepantla's mayor promised to build a wastewater treatment plant had already tied up the city's federal transfers with other proj

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