Standard & Poor's issued its first ratings of mutual funds that invest in Mexican bonds. The eight funds rated by the agency represent two sponsors-Valores Mexicanos Casa de Bolsa (the Valmes funds) and Vector Casa de Bolsa (the Vector funds.)

The New York-based bond rating agency is using a dedicated system to rate Mexican funds, which reflects the credit quality of fund investments, the funds' sensitivity to changing market conditions, and the capabilities of managers.

The funds were rated with the Mexican homogeneous rating scale, which is mandated by the Mexican government, and Standard & Poor's new Mexican scale. S&P's scale, which is similar to its international fund rating scale, is divided into more categories than the government scale.

Funds will be issued credit quality ratings from mx AAAf, for strong protection against losses from credit defaults, to mx CCCf, for funds that are vulnerable to losses.

S&P is rating several of Mexico's newly privatized pension funds, called siefores.

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