Mexico CAC move to set trend but bankers question importance

By Oliver West
13 Nov 2014

LatAm bond bankers said Mexico was sensible to include updated collective action clauses (CAC) in its new sovereign bond prospectus, but said the fact that investors were unlikely to demand a premium for the clauses suggested their relevance was limited.

Mexico, arguably EM’s most sophisticated sovereign issuer, included the International Capital Markets Association’s (ICMA) revamped pari passu and CAC clauses in a prospectus registered with the SEC this week for up to $6.31bn of bonds.

Kazakhstan became the first sovereign to adopt ICMA’s recommendations when it broke a 14 year international ...

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