Tuesday, October 5, 2010

Mexican 100yr Debt - Yeah, Its Bitter but Eat the Worm

Mexico sold $1 billion of bonds due in 100 years in the longest-maturity debt issued by a Latin American country. The government, which doubled the size of the sale from $500 million, sold the bonds to yield 6.1 percent, according to data compiled by Bloomberg. Deutsche Bank AG and Goldman Sachs Group Inc. arranged the sale.

Mexico’s 100-year bond sale is “evidence of how extraordinary the demand for yield has become,” Peter Boockvar, equity strategist at Miller Tabak & Co. in New York, said in a note to clients.

Um, no.  The 100 year bond sale is evidence of financial lunacy.  With all due respect to the UMS, investors here must be loco.

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About Me

A student of the markets that has held portfolio management, analysis and trading positions for over 15 years.