Last month Mexico issued $1 billion of 100-year bonds, the biggest century deal ever and the first from a Latin American issuer. On average, on every day since, more than 100 Mexicans have been arrested and 30 killed in the long-running military campaign against drug cartels. The country’s late 19th-century, early 20th-century president, Porfirio Diaz, famously commented that "poor Mexico" was "so far from God and so close to the United States". This was not previously thought to be a prophecy on bond yields, although the century bond trades at just a 235 basis point premium to 30-year US treasuries.
Diaz defined Mexican politics for three decades. He was ousted in a revolution in 1911 and died in exile in Paris. Mexican bondholders over the past century have endured similarly mixed fortunes. The country defaulted in 1982 and needed a US-coordinated bailout in 1994. Mexico is far from...
