Long-Bond Carnage Looms for Mexico

PesoBloomberg – For bond investors in Mexican companies stung by lackluster returns, it’s likely to get worse. While dollar-denominated corporate bonds in emerging markets have returned 4 percent this year, those from Mexico have just gained 0.5 percent.

And because long-dated notes that are more sensitive to interest-rate increases make up a disproportionate amount of the nation’s corporate debt, the underperformance is likely just a prelude to losses in the second half as the U.S. Federal Reserve prepares to boost benchmark borrowing costs.


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