Mexico Completes External Debt Swap

Mexico Tuesday successfully swapped €493.8 million ($651 million) of euro-denominated foreign debt for domestic debt, with the exercise of its (XWE) series of warrants enabling investors to exchange the securities (UMS bonds) for peso debt (M bonds). Warrant holders exchanged euro-denominated bonds maturing 2008 to 2017 for 8.59 billion pesos of local-currency bonds due 2023. This is the last of four swaps that have seen Mexico exchange around $3 billion of foreign-currency debt for peso-denominated debt. Last November, Mexico sold three series of dollar warrants to enable investors to swap $2.5 billion of dollar-denominated securities for peso debt. Then in March this year, the sovereign sold warrants to swap euro-denominated bonds with a nominal value of €494 million into local-currency bonds due in 2023. Mexico is hoping to bring down its foreign debt-to-GDP ratio to around 6% by the end of this year from around 12% in 2000.