Echo of deals done in Chile and Colombia
Mexico's domestic market has moved into cross-currency CDOs, a product that has already taken root in Chile and Colombia among bankers keen to cash in on sharp discrepancies between local and foreign yields on Latin American corporate and sovereign bonds. In a first-ever deal, Credit Suisse First Boston and Inversora Bursatil have registered with Mexican regulators a peso-denominated bond for up to Ps3 billion (US$272 million), backed by dollar sovereign bonds carrying a 10.375% coupon and due Feb. 17, 2009. If and when it is issued, the peso bond would mirror the underlying paper in the timing of coupon payments and final maturity. CSFB structured the transaction and Creel, Garcia-Cuellar & Muggenburg acted as legal counsel.