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April 2009 - February 2010. Drawing of swap line and auction from the US dollar Loan facility

On April 3, 2009 Banco de México announced (see announcement) that it would draw on its swap line with the Federal Reserve. This line was announced (see announcement) to the public on October 29, 2008 and would mature on October 30, 2009.

It was also announced that:

  • The proceeds from the swap transactions with the Federal Reserve would be used to finance auctions of dollar loans to domestic credit institutions.
  • The first auction will be held on the 21st of April. The purpose of these loans would be to provide financing to private sector participants who face pressures in obtaining term dollar funding.

The following summarizes the most important details of the first dollar loan auction, published by Banco de México on April 20 (see general rules and announcement):

  • Auction date: April 21st, 2009
  • Amount offered: USD 4.0 billion
  • Auction time: 12.00 – 12.30 pm
  • Loan maturity: 264 days
  • Interest payment periods: 88 days
  • First interest payment period start date: April 23rd, 2009
  • Second interest payment period start date: July 20th, 2009
  • Third interest payment period start date: October 16th, 2009
  • Final maturity date: January 12th, 2010
  • Auction type: Traditional
  • Allotment type: Variable rate
  • Bids: In percentage rounded to four digits after decimal point.
  • Minimum bid: USD 1.0 million
  • Maximum bidder allotment: 25% of total amount offered
  • Minimum rate for the first interest payment period 0.7063% (based on the relevant Overnight Index Swap rate plus a spread of 50 basis points).

Regarding the results, from the auctioned USD 4.0 billion, Banco de México allotted USD 3.212 billion in dollar loans at a weighted average interest rate of 0.7384% (see auction results).

The weighted interest rate for the second and third period of interest were 0.7334% and 0.7036% respectively. On January 27, 2010, the end of such SWAP line was announced (see announcement, available only in Spanish).