Reuters- As subprime worries wreak havoc in the U.S. housing market, Mexican mortgage-backed bonds are attracting growing interest from foreign hedge funds.
Some international investors, who previously shunned the Mexican mortgage market because of its relatively small size, are beginning to buy in, with issues paying yields as much as 2 percentage points above comparable U.S. Treasuries.
“We’ve seen stronger interest in the Mexican market from some international investors now that we’ve seen some adverse outcomes in the U.S. subprime market,” said Luis Arce, chief financial officer of New York hedge fund Christofferson, Robb and Company, which manages $1.5 billion of assets.
But now Mexico’s mortgage industry is attractive compared to the gloomy U.S. sector — and is expanding fast.
Outstanding mortgage-backed bonds in Mexico stand at $6 billion, having grown from virtually nil in 2003.
