Enhancing the Creditworthiness of Municipal Bonds : Innovations from Mexico

In 2001-03 the municipal bond market in Mexico was among the most active in the developing world. Government officials had found a way to dramatically enhance the creditworthiness of local government debt without using sovereign guarantees. The tec...

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Bibliographic Details
Main Authors: Leigland, James, Mandri-Perrott, Cledan
Language:English
Published: World Bank, Washington, DC 2012
Subjects:
TAX
Online Access:http://documents.worldbank.org/curated/en/2008/08/9988449/enhancing-creditworthiness-municipal-bonds-innovations-mexico
http://hdl.handle.net/10986/10598
Description
Summary:In 2001-03 the municipal bond market in Mexico was among the most active in the developing world. Government officials had found a way to dramatically enhance the creditworthiness of local government debt without using sovereign guarantees. The technique, adapted in part from private sector 'future flow' financing deals, enabled a state or local government to earn significantly higher credit ratings for bond issues than for its normal balance sheet debt. Many other developing countries have turned to Mexico as a source of innovation that may have application in their own markets.