Reply #34: Mexico's Peso Bond Yield May Fall to Six-Month Low on Calderon [View All]

[54anickel]

http://www.bloomberg.com/apps/news?pid=20601086&sid=aRNcfPDNc0ew&refer=latin_america

Aug. 15 (Bloomberg) -- Mexico may pay the lowest yield since February to borrow pesos over 10 years after Felipe Calderon said a court-ordered recount of presidential election ballots confirmed him as the winner, putting the governing party candidate a step closer to office.

``The fact that Calderon, even with a small margin, is still expected to come out ahead in the presidential election will be good for bonds,'' said Cristina Panait, an emerging-market analyst at Los Angeles-based Payden & Rygel, which manages more than $50 billion in assets.

The yield on the government's benchmark 8 percent bond due December 2015 has fallen 90 basis points to 8.21 percent yesterday since an initial tally of the July 2 election showed Calderon, of President Vicente Fox's National Action Party, beating rival Andres Manuel Lopez Obrador by 0.6 percentage point, according to Santander Central Hispano SA. A basis point is equal to 0.01 percentage point.

The government today plans to sell 3.1 billion pesos ($286 million) in a reopening of its benchmark bond at 2:30 p.m. New York time. In last month's auction, the government sold the 10- year bond at a yield of 8.69 percent.

Calderon's margin of victory was 243,934 votes of the 40.9 million valid votes cast July 2, and won't change by more than 1,500 votes following the recount, his party's chief lawyer, Cesar Nava, said on Aug. 13. Calderon, 43, pledged to maintain economic policies that have reduced the government's foreign debt, cut inflation and lowered interest rates.

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