As soon as foreign governments announced they were taking equity positions in the largest financial institutions to save them from bankruptcy, Mexican financial laws began to be tested. The issue arose from a phrase contained in different financial laws providing that no foreign governments shall participate, in any manner, in the capital stock of a Mexican financial institution. Because most of the financial institutions receiving aid had a subsidiary or an affiliate in Mexico (Mexican affiliate) that would indirectly benefit from these governmental infusions of capital, the plain reading of the statute, particularly the phrase in any manner, caused a stir.
With its 2008 IPO, Mexico's stock market operator Bolsa Mexicana de Valores became Latin America's fifth stock exchange to go public, and the second largest next to Brazil's. While preliminary results of the $444 million offering were disappointing, Mexico's financial lawyers predict the move strengthens Bolsa's place in the regional market, and contend the local exchange has an important edge over Bovespa among Latin America's Spanish-speaking businessmen....
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With its 2008 IPO, Mexico's stock market operator Bolsa Mexicana de Valores became Latin America's fifth stock exchange to go public, and the second largest next to Brazil's. While preliminary results of the $444 million offering were disappointing, Mexico's financial lawyers predict the move strengthens Bolsa's place in the regional market, and contend the local exchange has an important edge over Bovespa among Latin America's Spanish-speaking businessmen. "They will opt for Mexico because of the language connection," one attorney predicts.
Mexico burst onto international headlines with last April's deadly outbreak of the H1N1 flu virus that sparked a global pandemic and closed schools, museums and businesses for two weeks in the country. The resulting blow to Mexico's economy, already gripped by the effects of the global financial crisis, recorded the country's biggest drop in tourism revenue in the industry's recorded history and prompted the naming of 2009 the "lost summer" by Mexican officials.
Still, in the flu's aftermath Mexico's leading lawyers predicted little impact to the macro economy. Capital markets activity has notably slowed due to the larger economic crisis, and much of the caseload for Mexico's firms has shifted to the darker side of financial law – restructuring, bankruptcy and workouts. But there is a lack of sophistication in Mexico's 10-year-old bankruptcy laws, or Ley de Concursos Mercantiles, which have never been tested by large-scale failures. The inexperience of bankruptcy courts make them a last resort for local businesses, and Mexico's most adept arbitrators will be in high demand keeping clients and creditors at the negotiating table.
While there had been no large-scale bankruptcies at the time of writing, insolvency fears are ever-present in Mexico's business community. In the fourth quarter of 2008 cement producer Cemex – once the very model of a successful Mexican business – reported the first quarterly loss in its history, sparking the sale of its Australian operation and concerns over its ability to remain liquid. Last February Mexico's largest glassmaker Vitro defaulted on a $44.8 million bond payment, leading to a lawsuit from derivatives holder Credit Suisse.
The Mexican government has struggled to continue the ambitious Farac highway development program. After the successful tender of the first stage of the project in 2007, the government failed to receive a sufficient bid when it launched Farac II last March. The government subsequently divided the second portion, which included the construction and operation of some 480 miles of new and existing toll roads, and hoped to offer the trimmed-down package as Farac III to concessioners in 2010.
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