In 2008, Latin American corporates and sovereigns continued to broaden their activity in capital markets, despite increasingly adverse conditions. In December, Mexico showed guts and ingenuity when it got an impressive $2 billion deal priced in the midst of arguably the worst financial crisis in more than 70 years.
On December 16, the US Federal Reserve cut interest rates to nearly zero, which triggered a tumble in treasury yields. In turn, Mexico’s lending costs dropped to 5.59% after peaking at 10.19% on October 23. This enabled Goldman Sachs and Morgan Stanley to price a 10-year bond for the sovereign to yield 5.98%.
