TY - JOUR T1 - Municipal Future-Flow Bonds in Mexico JF - The Journal of Structured Finance SP - 24 LP - 35 DO - 10.3905/jsf.2004.426065 VL - 10 IS - 2 AU - James Leigland Y1 - 2004/07/31 UR - https://pm-research.com/content/10/2/24.abstract N2 - This article reviews developments in the Mexican municipal bond market, and explains how legal and regulatory reforms in the country adapted innovative private-sector financing techniques, like future-flow securitization, to pave the way for a small, but active municipal bond market. The question of whether or not such an approach can or should be used in other developing countries is explored, with special reference to South Africa. This article concludes by suggesting that in many countries, the specific techniques used in Mexico may not be cost-effective, but the basic principles underlying the financial mechanics clearly have application. Future-flow securitizations typically are driven by the need for capital-market access by a company located in a developing country where a low sovereign credit rating caps the rating of the company?s debt. In future-flow deals, the borrowing company normally has significant dependable foreign currency export receivables, establishes a special-purpose vehicle (SPV), sells receivables to the SPV, and gives customers instructions to pay a collection account controlled by the SPV. The SPV issues securities to finance the purchase of accounts receivable. ER -