Mexican DCM Suffers Lack of Confidence

Mexico’s institutional investor base is flush with cash but a lack of confidence and heighted aversion to risk is keeping that money from flowing into the debt markets, according to local DCM bankers. Credit troubles in the US are largely to blame, say the bankers, who note plain vanilla deals are being chopped from the average MXP3bn size seen in 2007 to a MXP1.0bn-MXP1.5bn range this year. Structured finance deals are getting hit much worse, with number of deals being affected noticeably, say the executives. If conditions improve towards the end of the year, bond issue sizes might return to the sizes seen last year, says Gerardo Tietzsch, head of corporate finance at Ixe.