Capitalizing on easier market conditions and favorable reviews from rating agencies, the Mexican State of Veracruz slashed the yield on its debt by refinancing Ps2 billion (US$184 million) in asset-backed loans owed to federal development bank Banobras. Under the same terms, the state also took on a fresh Ps733 million (US$67 million) loan from Mexico's Banorte.
Veracruz stuck to the typically short cycle of bank funding because of gubernatorial elections in 2004, an event that cynical observers say may have indirectly led to the choice of Banobras. According to some domestic media, the head of the development bank, Tomas Ruiz, has been eyeing the governorship, now in the hands of Miguel Aleman, a former television magnate and scion of the opposition Ruling Institutional Party (PRI). Ruiz was a finance undersecretary is former PRI administrations.