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 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.

Bibliographic Details

Main Authors:	Leigland, James, Mandri-Perrott, Cledan
Language:	English
Published:	World Bank, Washington, DC 2008-08
Subjects:	ACCOUNTABILITY, ADEQUATE ASSURANCES, AFFORDABLE INTEREST RATES, BALANCE SHEET, BALANCE SHEET DEBT, BANK LENDING, BOND ISSUANCES, BOND ISSUES, BOND SALES, BONDHOLDERS, BORROWER, BORROWINGS, CAPITAL MARKETS, CAPITALIZATION, CAR LOANS, CASE OF DEFAULT, CASH FLOWS, CENTRAL GOVERNMENTS, COLLATERAL, COMMERCIAL BANKS, CONTINGENT LIABILITY, CREDIT ENHANCEMENTS, CREDIT RATING, CREDIT RATING AGENCIES, CREDIT RATINGS, CREDIT STANDING, CREDIT STRENGTH, CREDITORS, CREDITWORTHINESS, CURRENCY, DEBT ISSUANCE, DEBT OBLIGATIONS, DEBT REPAYMENT, DEBT REPAYMENTS, DEBT SECURITIES, DEBT SERVICE, DEBT SERVICE PAYMENT, DEBT SERVICE PAYMENTS, DEBTS, DECENTRALIZATION, DEVELOPING COUNTRIES, DEVELOPING COUNTRY, DEVELOPMENT BANK, ECONOMIC GROWTH, EMERGING MARKET, EMERGING MARKET DEBT, EXISTING ASSETS, FACE VALUE, FINANCES, FINANCIAL ADVISORS, FINANCIAL AUTONOMY, FINANCIAL CRISIS, FINANCIAL HEALTH, FINANCINGS, FUTURE DEBT, GENERAL OBLIGATION, GENERAL OBLIGATION BORROWING, GENERAL OBLIGATIONS, GOVERNMENT DEBT, GOVERNMENT EXPENDITURE, GOVERNMENT REVENUE, HOME MORTGAGES, IMPLICIT GUARANTEE, IMPLICIT GUARANTEES, INFRASTRUCTURE BONDS, INTEREST RATES, INTERGOVERNMENTAL TRANSFERS, INTERNAL CREDIT ENHANCEMENTS, INTERNATIONAL CAPITAL, INTERNATIONAL CAPITAL MARKETS, INTERNATIONAL FINANCE, INTERNATIONAL SETTLEMENT, LENDERS, LOAN, LOAN AGREEMENTS, LOAN SIZE, LOCAL ADMINISTRATION, LOCAL GOVERNMENT, LOCAL GOVERNMENT BORROWER, LOCAL GOVERNMENT BORROWERS, LOCAL GOVERNMENT DEBT, LOCAL GOVERNMENT REVENUE, LOCAL GOVERNMENTS, LOW INTEREST RATES, MONOPOLY, MORAL HAZARD, MUNICIPAL, MUNICIPAL BOND, MUNICIPAL BOND ISSUANCE, MUNICIPAL BOND ISSUES, MUNICIPAL BOND MARKET, MUNICIPAL BONDS, MUNICIPAL BORROWERS, MUNICIPAL BORROWING, MUNICIPAL BUDGETS, MUNICIPAL DEBT, MUNICIPAL GOVERNMENTS, MUNICIPALITIES, OUTSTANDING DEBT, PAYMENT MECHANISMS, PENSION, PENSION FUND, PENSION FUNDS, PRIVATE FINANCIAL INSTITUTIONS, PRIVATE INFRASTRUCTURE, PUBLIC FINANCE, PUBLIC-PRIVATE PARTNERSHIP, PUBLIC-PRIVATE PARTNERSHIPS, RECEIVABLES, RESERVE, RESERVE ACCOUNTS, REVENUE BONDS, REVENUE INTERCEPTS, RISK OF DEFAULT, SECURITIES, SOVEREIGN DEBT, SOVEREIGN GUARANTEES, SUBNATIONAL FINANCE, SUSTAINABLE DEVELOPMENT, TAX, TAX REVENUES, TECHNICAL ASSISTANCE, TELEPHONE SERVICE, TRADABLE SECURITIES, TRANSACTION, TRANSACTION COSTS, TURNOVER, URBAN DEVELOPMENT,
Online Access:	http://documents.worldbank.org/curated/en/2008/08/9988449/enhancing-creditworthiness-municipal-bonds-innovations-mexico https://hdl.handle.net/10986/10598
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