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All bonds issued by Mexico with maturity scheduled for 2018 are traded at a huge discount of their face value. I mean whatever currency or stock exchange used here’s an example : United States of Mexico

For reference, they are traded at only ¼ of Venezualian bonds discount value which is rated as being on selective default.

This situation seems to be ongoing since the 2000s when the bonds where issued. What can explain such future default since the bonds where all issed after 1982 ?

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  • Mexico bonds’s maturities for 2021 and after are traded at a level near 100. Except for 2115 where a 83 level is something acceptable for a 100 year maturity bond. It seems, the problem should 2018 specific for being considered far worst than Venezuelan bonds…
    – user2284570
    Sep 26, 2018 at 18:46
  • You should add the full values you are seeing, in this question, so that it can be answered without going to an external site. I think the problem here may be your interpretation of site data, but hard to say unless you lay down the facts as you see them.
    – Grade 'Eh' Bacon
    Sep 26, 2018 at 18:55
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    You spent $1k on something without understanding why it was priced that way?
    – Grade 'Eh' Bacon
    Sep 26, 2018 at 19:56
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    @Grade'Eh'Bacon hemmm… Yes, I spent the minimum for my broker. And I immediately put a sell order. But what’s sure is I won’t spend more until I understand the reason. Don’t forget that since the question is well worded but low view that you can upvote it.
    – user2284570
    Sep 28, 2018 at 12:40
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    @Grade'Eh'Bacon Ok, I now learned what is a dual Currency bond. So everything is clear.
    – user2284570
    Dec 4, 2018 at 18:25

2 Answers 2

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Simply, this is a dual currency bond which means it is quoted in euro but to be paid back in Pesos :

1 EUR=23.23 MXN

23.23×4.5€=104.535MXN

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The most likely reason is there is no reason to sell a mature bond (it's nearing the end of 2018). Whoever owns it can simple cash it in for the face value.

Mexican bonds seem to be doing reasonably well (or at least not Venezuelan bad) in the market.

Some Background (From http://www.worldgovernmentbonds.com) This is the Mexican Government Bond Yields

Note the 7.94%

And this is day-traded Mexican Bonds historical data from tradingeconomics.com enter image description here

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