Mexico Gets Hefty World Bank Loan

The World Bank has approved a $1.5bn loan for Mexico to support economic policies in response to the global crisis. The loan is due November 2021 and basis 6-month Libor, including a 0.25% disbursement fee. The project supports economic policies to mitigate the impact of the global crisis and strengthen the medium-term framework for sustainable economic recovery and growth. The focus is fiscal and financial sustainability, labor market efficiency and improved integration in the global economy. Among the stated aims are getting a 10.3% increase in GDP from non-oil tax revenue in 2010, and raising by 35% the number of outlets that provide banking services, including bank branches, and reducing the average tariff for manufactured imports to 5.3%. Separately, the World Bank also signed a $491m loan for influenza virus prevention and control in Mexico. The 18-year deal is also basis 6-month Libor and pays 25bp upfront. Mexico was Monday cut by Fitch to BBB and continues to unnerve investors.