Money Market Investments

Government Securities

Cete (Treasury Bills)

It is considered one of the most important Money Market instruments; they are placed at a discount and are issued by the Federal Government, who is obliged to pay the nominal value when they mature.

Counterpart risk for the investor: Risk-free, as it has guarantee from the Federal Government.

Term: 28, 91,182, and 360 days

Return on Investment and Interests: It depends on the purchasing price and the nominal value given at a discount rate (if the investor keeps the instrument until the maturity date) or its selling price (if the investor decides to sell before it matures).

Marketability: Very high

Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under.)

Liquidity: High, given the extent of the existing over-the-counter market.

Legal Regime: 50 interest rate base points.

Bondes (Development Bank Bonds)

Long-term securities for which the Federal Government has direct obligation to pay a certain amount of money when they mature, as well as interest payment every six months; they form part of the floating rate government instrument family.

Counterpart risk for the investor: Risk-free, as it has guarantee from the Federal Government.

Term: 1,820 days

Return on Investment and Interests: BONDES are placed at a price which may be above or below its Nominal Value. Its yield is produced from the differential between the purchasing price and its continuance value (if the investor keeps the instrument until the maturity date) or its selling price (if the investor decides to sell before it matures); In addition, it grants an interest payment (coupon) payable every 182 days, accrued from its nominal value.

Marketability: Very high

Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under.)

Liquidity: High, through an over-the-counter market.

Legal Regime: 50 interest rate base points

Bonds

Long-term debt security issued by the Federal Government offering fixed interest payments periodically for a period of more than one year. The Federal Government is obliged to pay a certain amount of money (Nominal Value) when the instrument matures, as well as interest payment every six months; they form part of the fixed rate government instrument family. 
Counterpart risk for the investor: Risk-free, as it has guarantee from the Federal Government.

Term 3, 5, 7, 10 and 20 years

Return on Investment and Interests BONOS are placed at a price which may be above or below its Nominal Value. Its yield is produced from the differential between the purchasing price and its continuance value (if the investor keeps the instrument until the maturity date) or its selling price (if the investor decides to sell before it matures); In addition, it grants an interest payment (coupon) payable every 182 days accrued from its nominal value.

Marketability: Very high

Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under.)

Liquidity: High, through an over-the-counter market.

Legal Regime: 50 interest rate base points for those securities issued after 2003; except those that were exempted and were issued before 2003.

BPAS (Savings Protection Bonds)

Medium and long term negotiable instruments issued by the IPAB. For these instruments, interest payment periods should equal the one month Cete term, issued at the beginning of each period. They form part of the floating rate government instrument family.  
Counterpart risk for the investor: Risk-free, as it has guarantee from the Federal Government.

Term: 1,092 and 1,820 days (28- day multiples).

Return on Investment and Interests: BPAS are placed at a price which may be above or below its Nominal Value. Its yield is produced from the differential between the purchasing price and its continuance value (if the investor keeps the instrument until the maturity date) or its selling price (if the investor decides to sell before it matures); In addition, it grants an interest payment (coupon) payable every 182 days accrued from its nominal Value

Marketability: Very high

Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under.)

Liquidity: High, through an over-the-counter market.

Legal Regime: 50 interest rate base points for those securities issued after 2003.

Cbic’s  (Government Stock Certificates)

These are financial instruments denominated in Investment Units guaranteed by the Federal Government. Interests are paid every six months, in addition to its Nominal Value at the date of maturity. In order to pay such quantities, the stated amounts are expressed in local currency UDIS (Inflation Adjusted Bonds), and use the session’s current UDI value on the day the operation is carried out.

Counterpart risk for the investor: Risk-free, as it has guarantee from the Federal Government.

Term: 20 and 30 years.

Return on Investment and Interests: The interest rate is fixed and is payable every 182 days. Capital gains are produced from the differential between the purchasing price and its nominal value (if the investor keeps the instrument until the maturity date) or its selling price (if the investor decides to sell before it matures).

Marketability: Medium

Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under.)

Liquidity: High, through an over-the-counter market.

Legal Regime: 50 interest rate base points for those securities issued after 2003; except those that were exempted and were issued before 2003.

Udibonos (Development Bonds)

Unit denominated nominative negotiable instruments. The Federal Government is obliged to pay interests every six months in addition to its Nominal Value when the instrument matures. In order to pay such quantities, the stated amounts are expressed in local currency UDIS (Inflation Adjusted Bonds), and use the current UDI value on the day the operation is carried out.

Counterpart risk for the investor: UDIBONOS are fully supported by the Federal Government.

Term: 3, 5 and 10 years

Return on Investment and Interests: The interest rate is fixed and is payable every 182 days. Capital gains are produced from the differential between the purchasing price and its nominal value (if the investor keeps the instrument until the maturity date) or its selling price (if the investor decides to sell before it matures).

Marketability: Medium

Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under.)

Liquidity: High, through an over-the-counter market.

Legal Regime: 50 interest rate base points for those securities issued after 2003.

Brem’s (Monetary regulation Bonds)

Medium and long term negotiable instruments under the responsibility of Banco de Mexico. Such titles accrue interests every month, that is, every 28 days or the substitute term in the case of non-working days, and have the purpose of regulating liquidity levels in the Money market.

Counterpart risk for the investor: BREMS are fully supported by the Federal Government.

Term: 1 and 3 years.

Return on Investment and Interests. BREMS are placed at a price which may be above or below its Nominal Value. Its yield is produced from the differential between the purchasing price and its nominal value (if the investor keeps the instrument until the maturity date) or its selling price (if the investor decides to sell before it matures); In addition, it grants an interest payment (coupon) payable every 182 days accrued from its nominal value.

Marketability: High

Possible buyers: Individuals or companies, national or foreign, and institutional investors (only if allowed by the legal regime that they are constituted under).

Liquidity: High, through an over-the-counter market.

Legal Regime: 50 interest rate base points for those securities issued after 2003.