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Mexico's never-used $72 billion IMF loan wins traders

Thursday, November 8, 2012

Mexico’s push to renew a $72 billion International Monetary Fund loan that it’s never used is showing why the country is safer than Brazil to bond traders.

Protecting Mexican dollar bonds against default for five years using swaps cost 0.98 percent annually as of yesterday.

That’s 183 basis points, or 1.83 percentage points, less than when the country obtained the no-interest credit line in April 2009 and four basis points cheaper than credit-default swaps for Brazilian notes.

Source: Bloomberg