LatinFinance - March/April 2013 - 51
Investor Report
Mexico
Turning point
Mexico’s state finances are set for an overhaul under a new economic
reform plan. But short-term borrowing is causing concern
By Mariana Santibáñez
W
Also in this section
Mexico’s Banks
toughen up
page 55
FiBras: the reit stuFF?
page 57
UPDATE
For more stories on Mexican debt see
www.latinfinance.com
>
hen the the State of Jalisco was selected to stage the 2011 Pan American
Games, it was seen as an opportunity to boost the local economy in this part
of western Mexico, the heart of tequila country and home of Guadalajara.
It was a chance to bring in tourist pesos, modernize local infrastructure, and perhaps
even give the state a shot at hosting the Olympic Games.
Debt default was not on the agenda.
But then in December, the state missed a payment on a 1.4 billion peso ($110
million) loan. Banco Interacciones – a Mexican bank specializing in the sub-sovereign
sector – had extended the loan, part of the 7.5 billion pesos Jalisco needed to host the
event.
The road to Jalisco’s default last year was strewn with stories of inter-party
bickering and fiscal mismanagement in a system that sorely lacks transparency.
The tale has been repeated, although in less dramatic fashion, in other parts of the
country: nine states and municipalities defaulted on their debt in 2012.
And while ratings agencies do not foresee sub-sovereign debt problems spreading
systemically, they do not discount the possibility of more credit events on unsecured
short-term debt.
New laws
Change is afoot in the form of a new transparency law for state and municipal
finances, approved by Congress last November.
Detractors say the law is insufficient and are calling for a complete reworking of
tax distribution system between the federal government and the states. Meanwhile,
March/April 2013
LatinFinance 51
http://www.latinfinance.com
LatinFinance - March/April 2013
Table of Contents for the Digital Edition of LatinFinance - March/April 2013
Latin Finance - March/April 2013
Contents
A moment in time
Cry of battle
Top of the crop
Comeback club
Dollar pain
Africa: Commodities in common
China: Funding the frenzy
Russia: Beyond energy
Highs and lows
Back-up plans
Infrastructure: Upping the ante
Real estate funds: Reaching overseas
Brazil Stars Index: Managing best
Sub-sovereign debt: Short-term troubles
Banking: Basel high ground
Real estate funds: Fibra advance
Infrastructure: Counting the cost
Casualties of war
LatinFinance - March/April 2013 - Latin Finance - March/April 2013
LatinFinance - March/April 2013 - Cover2
LatinFinance - March/April 2013 - Contents
LatinFinance - March/April 2013 - 2
LatinFinance - March/April 2013 - 3
LatinFinance - March/April 2013 - 4
LatinFinance - March/April 2013 - 5
LatinFinance - March/April 2013 - 6
LatinFinance - March/April 2013 - 7
LatinFinance - March/April 2013 - 8
LatinFinance - March/April 2013 - 9
LatinFinance - March/April 2013 - 10
LatinFinance - March/April 2013 - 11
LatinFinance - March/April 2013 - A moment in time
LatinFinance - March/April 2013 - 13
LatinFinance - March/April 2013 - 14
LatinFinance - March/April 2013 - 15
LatinFinance - March/April 2013 - 16
LatinFinance - March/April 2013 - 17
LatinFinance - March/April 2013 - 18
LatinFinance - March/April 2013 - 19
LatinFinance - March/April 2013 - Cry of battle
LatinFinance - March/April 2013 - 21
LatinFinance - March/April 2013 - Top of the crop
LatinFinance - March/April 2013 - 23
LatinFinance - March/April 2013 - 24
LatinFinance - March/April 2013 - 25
LatinFinance - March/April 2013 - 26
LatinFinance - March/April 2013 - Comeback club
LatinFinance - March/April 2013 - 28
LatinFinance - March/April 2013 - 29
LatinFinance - March/April 2013 - Dollar pain
LatinFinance - March/April 2013 - 31
LatinFinance - March/April 2013 - Africa: Commodities in common
LatinFinance - March/April 2013 - 33
LatinFinance - March/April 2013 - China: Funding the frenzy
LatinFinance - March/April 2013 - 35
LatinFinance - March/April 2013 - Russia: Beyond energy
LatinFinance - March/April 2013 - Highs and lows
LatinFinance - March/April 2013 - 38
LatinFinance - March/April 2013 - 39
LatinFinance - March/April 2013 - Back-up plans
LatinFinance - March/April 2013 - 41
LatinFinance - March/April 2013 - 42
LatinFinance - March/April 2013 - Infrastructure: Upping the ante
LatinFinance - March/April 2013 - 44
LatinFinance - March/April 2013 - 45
LatinFinance - March/April 2013 - Real estate funds: Reaching overseas
LatinFinance - March/April 2013 - 47
LatinFinance - March/April 2013 - 48
LatinFinance - March/April 2013 - 49
LatinFinance - March/April 2013 - Brazil Stars Index: Managing best
LatinFinance - March/April 2013 - Sub-sovereign debt: Short-term troubles
LatinFinance - March/April 2013 - 52
LatinFinance - March/April 2013 - 53
LatinFinance - March/April 2013 - 54
LatinFinance - March/April 2013 - Banking: Basel high ground
LatinFinance - March/April 2013 - 56
LatinFinance - March/April 2013 - Real estate funds: Fibra advance
LatinFinance - March/April 2013 - 58
LatinFinance - March/April 2013 - Infrastructure: Counting the cost
LatinFinance - March/April 2013 - 60
LatinFinance - March/April 2013 - 61
LatinFinance - March/April 2013 - 62
LatinFinance - March/April 2013 - 63
LatinFinance - March/April 2013 - Casualties of war
LatinFinance - March/April 2013 - Cover3
LatinFinance - March/April 2013 - Cover4
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