With economic recovery firmly established in Mexico, the government plans to consolidate its success in foreign debt markets and focus on the development of a peso-denominated yield curve. The immediate new horizon, though, is the presidential election due in 2000. The finance ministry is working overtime to overthrow the unfortunate Mexican tradition of capital flight and devaluations accompanying changes of administration. So current policy aims to clean house before the elections in both external and internal debt management.
The government largely completed its mission in external financing last year with a massive debt restructuring that included a $6 billion bond issue and a Brady bond exchange. As a result, government financing requirements have fallen dramatically. The United Mexican States (UMS) will borrow $1.5 billion next year, with a further $2 billion in maturities facing the state agencies, including some $600 million in bonds for development bank Nacional Financiera. This year...
