The digital advertising sector in Mexico expanded 96% in 2008 to represent 2% of total advertising investment in Mexico, according to Interactive Advertising Bureau and the Mexican Association of Advertising Agencies, as reported by Sentido Comun.

Mexican tortilla and cornflour maker Gruma, S.A.B. (NYSE: GMK) said that the mark-to-market value of its exchange rate derivatives positions was a negative US$684 million as of Oct. 8, according to a Dow Jones report.

Responding to a request by the Mexican stock exchange for information on its financial position, Gruma said most of the maturities on its derivatives are in 2009, 2010 and 2011.

With respect to Gruma’s exchange rate derivative liabilities in 2008, a November 13, 2008 Sentido Comun report said that the company had obtained a credit line from an undisclosed lender that it will use to close out its derivative positions requiring payments this year. It appears that the company’s 2008 derivative liabilities are the result of margin calls made by the contracting counterparty following the sharp depreciation of the peso in recent months. Without the credit line, the report said Gruma would have been required to pay US$276 million on November 25, 2008 to the counterparty. Gruma did not reveal the name of the counterparty or the financial institution that had brokered its purchase of exchange rate derivative contracts; it may be speculated, however, that they are major Wall Street firms.

The peso’s depreciation has caused a number of major Mexican companies to generate mark-to-market losses in their derivatives positions and engendered extraordinary demand for dollars that sent the peso to record lows and prompted Mexico’s central bank to sell $8.9 billion in the exchange market.

Gruma owns a 9% interest in Grupo Financiero Banorte, the fifth largest bank in Mexico. Gruma said it was exploring financing alternatives to settle its obligations relating to its derivatives with maturities in 2009, 2010, and 2011, which are not currently subject to margin calls.

Grupo TMM, S.A.B. (NYSE: TMM), a Mexican intermodal transportation and logistics company, announced on October 17, 2008 that it had received a notice from the New York Stock Exchange that the company was not in compliance with the NYSE continued listing standard, which requires a minimum average closing price of US$1.00 per ADR over a consecutive 30-day trading period, according to a Marketwire report.

Under the NYSE’s rules, the company has six months from the date of the notice to cure this deficiency. During this period, the company’s ADRs will continue trading on the NYSE, subject to compliance with other applicable NYSE listing requirements. The company has notified the NYSE that it intends to cure the deficiency.

Monterrey-based glassmaker Vitro, S.A.B. (NYSE: VTO) has named Hugo Lara as its new CEO (Director General) following the surprise resignation of Federico Sada Gonzalez on November 6, 2008, according to a Sentido Comun report.  Sada, who led Vitro for 14 years and who is the grandson of Vitro’s founder and son of Adrian Sada Trevino, who led the company from 1972-1991, remains a member of its board of directors.

Lara worked at Vitro for five years before being named CEO; before joining Vitro, he was CEO of Parmalat’s Mexico operations.

Fitch Ratings has removed the municipality of Xalapa, state of Veracruz, from its local ratings system, according to a Sentido Comun report that cited a Fitch press release. Fitch, which had given the municipality its sixth-highest rating of “A” on the local ratings scale prior to the removal, did not disclose the reason for its decision. Xalapa is the second largest city in the Veracruz state after Veracruz, Veracruz.

My colleague Doug Jacobson has reported on his International Trade Law News blog that The American Association of Exporters and Importers (AAEI) and the Automotive Industry Action Group (AIAG) will hold the first-ever Southern Border Trade Symposium in San Antonio, Texas on November 18, 2008. The program will feature speakers on U.S. and Mexico customs issues, including supply chain security and other important cross border topics. The program’s keynote speaker is Mr. Brad Skinner, director of CBP’s C-TPAT program.

An optional Harmonized Tariff Schedule training program will be held on November 19, 2008.

More information and registration information for these programs is available here.

Bloomberg reported today that Petroleos Mexicanos, commonly referred to as Pemex, may award the company’s first external oil production and exploration contract by the end of 2009.  The report said the contracts will focus on deepwater projects or its onshore Chicontepec Field, which are areas that Pemex lacks expertise.  The first tender offer is expected to be released by the middle of 2009, according to Carlos Morales, Pemex’s Director of Exploration and Production.  Stay tuned.

Pemex’s so-called “citizen bonds”, which Mexico’s Congress allowed state oil monopoly to publicly issue to as part of its October 28, 2008 Pemex reform package, are unlikely to be a significant source of financing for the company in 2009, according to Luis Flores, an economist at Ixe Banco who was quoted in report by The News.  Mr. Flores said that the citizen bonds would probably represent no more than 3 to 5 percent of Pemex’s total debt, meaning no more than US$300 million.

Mexico Law Blog included a detailed summary of the Pemex reforms in a November 3, 2008 post.

The citizen bonds appear to be something of a hybrid security: returns to bondholders are based on Pemex earnings but the bonds do not grant owners voting rights and do not pay a fixed coupon.   The October 28 reforms did not allow Pemex to issue equity interests to the public, contrary to the expectations of most investors and analysts.

Starwood Hotels & Resorts (NYSE: HOT) announced on November 7, 2008 the debut of its St. Regis brand in Latin America with the opening of the St. Regis Punta Mita Resort, a joint venture between Starwood Hotels & Resorts and Ideurban Consultores, which constructed the project, according to a company press release. 

The resort is located in Bahia de Banderas, in the Riviera Nayarit, just north of Puerto Vallarta.

The land on which the resort is located is owned by Grupo 1818, S.A. de C.V., a company owned by a group of undisclosed Mexican real estate investors.

In late August and early September 2008, Mexico spent approximately US$1.5 billion on derivative contracts to protect itself from the oil price remaining below US$70 barrel.  The contracts give Mexico the right to sell oil at prices ranging from US$70 to US$100 per barrel, according to a November 10, 2008 Financial Times report. 

Tomas Lajous, a UBS analyst in Mexico City who was quoted in the report said, “The hedge is very good news . . . a presumed cost of some $1.5bn is immaterial relative to risks.”  Mexico relies on oil exports for up to 40 percent of government revenue. 

On Monday, November 10, 2008, ratings agency Fitch cut the outlook on Mexico’s sovereign debt from stable to negative, citing falling oil prices, among other factors.