Latin American deal of the year: Mexico’s $2.5 billion debt exchange warrants

Mexico has long been at the forefront of innovation in sovereign liability management, and in 2005 it launched one of its most impressive deals to date, going well beyond a straightforward bond exchange.

Mexico has done such a good job of developing its yield curves in both pesos and dollars that bond exchanges are increasingly useless: anybody can buy one security and sell another, and there’s little point in doing so through the Mexican government rather than straightforwardly in the secondary market.