A new way for Mexican funds

Author: | Published: 6 Oct 2010

Relaxed regulations and an innovative new hybrid product have opened up investment options for Mexican pension funds (Afores), explained Jean Michel Enriquez of Creel Garcia-Cuéllar, Aiza y Enríquez at a session on new capital markets products yesterday afternoon.

Pioneered in late 2007, before the global financial crisis, the structured notes pay both a principal guaranteed amount, plus a coupon linked to the EBITDA and performance of the underlying asset. But largely due to suspicion of equity risk among investors, the product failed to take off before liquidity was squeezed, and...