There's no doubt that the spread environment in Mexico has turned harsher, but sagging interest rates are mitigating much of the sting of the steeper spreads.

More importantly, domestic market investors remain open for business, as evidenced by an RMBS placed last week for 793 million inflation indexed units (UDIs) ($300 million). The originator, government agency Infonavit, paid a weighted spread over local treasurys of 118 basis points, up from 96 basis points on a deal last October. But the weighted yield of 4.62% was about six basis points higher.

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