Chapter

Mexican Debt Exchange: Lessons and Issues

Editor(s):
Peter Wickham, Jacob Frenkel, and Michael Dooley
Published Date:
March 1989
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    Author(s)
    DAVID FOLKERTS-LANDAU and CARLOS ALFREDO RODRIGUEZ* 

    Mexico undertook its first debt-exchange programan exchange of discounted restructured loan debt for new bonds with improved debt-service characteristicsin early 1988. The rate at which old restructured debt was exchanged for the new bonds was determined in an auction; this note analyzes the outcome of the auction and the valuation of the new bonds with a simple asset pricing model and data from the secondary market for restructured loans.

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