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Debt Market

DEBT MARKET

Eurobonds
A Eurobond is any long-term debt instrument issued and sold outside the country in the currency in which it is denominated. An example would be an UMS (United Mexican States) which is debt issued by the Mexican government in dollars, euros or yens. The Eurobonds market is very large and makes an excellent option for the diversification investors are looking for.

Corporate Bonds
Corporate bonds represents debt issued by a corporation. There is a wide variety of corporate bonds from which the investor can choose from in accordance to his risk tolerance, yield and duration. Usually Corporate Bonds pay higher yield than those issued by a government because the investor accepts a higher risk.

United States Treasury Bonds
Debt issued by the United States Federal Government for investors seeking minimum risk. The maturity varies from 30 days to 30 years.

Agency Bonds
The agencies from the United States government that directly issue debt are:

  • Farm Credit Administration
  • Government National Mortgage Association (Ginnie Mae)

The agencies from the United States government that issue debt but are privately managed are:

  • Federal Home Loan Mortgage Corporation (Freddie Mac)
  • Federal National Mortgage Association (Fannie Mae)
  • Student Loan Marketing Association (Sallie Mae)

Bonds from these issuers are not considered risk free because they are not 100% guarantee by the American government (such as Treasuries), however their risk is extremely low considering the strength of their activities and their close relation with the Federal Government.
Mexico also issues debt through some of its agencies, such as:

  • Pemex
  • Bancomext
  • Comisión Federal de Electricidad

Money Market Fund
Conservative money fund with an average portfolio life of 90 days or less. This fund invests in securities issued by the U.S. government and its agencies, prime bank obligations whose issuers are rated AAA, AA or the equivalent, or instruments collateralized by such obligations. Every day all available cash balances of Monex Securities, Inc. accounts are swept into this fund.

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