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Wait-and-see in Mexico following monetary tightening

Citing inflation concern, Mexico's central bank put the squeeze on monetary policy Sept. 23, forcing up short-term interest rates. Whether securitized deals will be deeply affected remains to be seen. "Those that are floaters should face some trouble," said Rene Ibarra, structured finance analyst at Fitch Mexico. Next up in the domestic securitized market is a Ps500 million (US$49.4 million) deal backed with housing sector loans extended by Metrofinanciera (see ASR 9/23, p.20). IXE Casa de Bolsa is handling that deal, which, as a floater, is being priced off 182-day Cete treasuries. Not all structuring agents are anxious. "The next (securitized) issues will take awhile," said Rodrigo Barrera, senior associate at Acciones y Valores de Mexico (Accival). "The move isn't something that worries us too much." Accival's last two structured deals were floaters priced off 182-day Cetes (see ASR 9/9, p.26 and ASR 9/16, p.23). At the auction following the monetary tightening, 91-day Cete treasuries shot up 204 basis points from the previous weeks, to 9.4%. The Central Bank influences interest rates by manipulating the corto, which is the amount by which banks are kept short their daily monetary needs. In its last move, the bank hiked the corto to Ps400 million from Ps300 million.

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