Mexico Development Banks Provide Jumbo Guarantees

Nafinsa and Bancomext have launched a program through which they will provide MXP50bn in partial guarantees to Mexican companies needing to roll over short-term debt. The two development banks will guarantee up to 50% of the amount of new debt issued. Businesses and non-bank financial companies will be able to have the guarantees on up to 180-day paper issued through the end of 2008. The program was initially slated to launch November 1, but it was moved forward, as more Mexican borrowers have struggled recently to sell short-term debt at auction. Mexican companies have to roll over some MXP32bn in short-term debt by the end of the year. Nafinsa and Bancomext are also making available MXP35bn in credit facilities to small and medium-sized enterprises.