Reform leads to first municipal debt issuance in Mexico.

• Position: News Briefs

The central Mexico city of Aguascalientes sold about $9 million (90 million pesos) in certificates of obligation in December, marking the country's first municipal debt issuance. The sale was made possible by a series of reforms last year, one of which allows municipalities to use federal tax participation payments to back bonds and other debt. To issue this kind of debt, states and municipalities must develop a master trust contract regulating how participation payments will be used to service the debt. Although the law only allows debt to be sold to...